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1099R is portfolio income. You can put it on line 8.
Items to be reported on line 8 include:
Unpaid compensation received by the decedent's estate that is IRD, and
Any part of a total distribution shown on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., that is treated as ordinary income.
I am not sure why. I will opt out to give another expert a chance answer.
You are correct - that income is PASSED to beneficiaries.However - there are certain steps to follow.
First of all - we have to report that income on the trust tax return - form 1041 line 8 exactly as previous expert suggested.Then - we deduct the SAME amount on form 1041 line 18 as Income distribution deductionThat will result ZERO taxable income for the trust and zero tax liability.
and finally - it will be reported on K1 which will be used by the beneficiary for his/her individual tax return preparation.
Let me know if you need any help with reporting.
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