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dO YOU HAVE A TAX EXPERT
Submitted: 2 years ago.Category: Tax
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3/2/2016
Tax Professional: emc011075, Tax adviser replied 2 years ago
emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3,704
Experience: IRS licensed Enrolled Agent and tax instructor
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Yes. My name is ***** ***** I will be happy to help you. What's your tax question?

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Customer reply replied 2 years ago
Hi Eva,I have a grantor trust return. The grantor deceased on 5/5/15 and the trust has received a 1099R. I am not sure where to put this on the return.
Tax Professional: emc011075, Tax adviser replied 2 years ago

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.

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Customer reply replied 2 years ago
I thought that the income would then go to the beneficiaries on a K-1 but it was on the 1041 and taxed at 39+%
Tax Professional: emc011075, Tax adviser replied 2 years ago

I am not sure why. I will opt out to give another expert a chance answer.

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Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,860
Experience: Taxes, Immigration, Labor Relations
Verified

You are correct - that income is PASSED to beneficiaries.
However - there are certain steps to follow.

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Tax Professional: Lev, Tax Advisor replied 2 years ago

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 deduction
That 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.

.

I appreciate if you take a moment to rate the answer.
Experts are ONLY credited when answers are rated positively.
If you still have any doubts, need clarification - please be sure to ask.
I am here to help you with all tax related issues.

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Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,860
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