Trust fund

Forum|Forum|2 years ago
January 23, 2024
2 replies
0 views

my grandmother died, and set up a trust fund for education for all of her descendants. my daughter and my son received $1000 for graduating high school will they be receiving a tax form for that money? If so what tax form should I be expecting 1099 MISC?

DMarkM1

It depends. First, they should not get a form 1099. Next, if the distributions were principal only, those are not taxable and no tax forms will be issued. The trust may send courtesy letters to recipients showing amounts disbursed.

However, if the trust had income (for example interest earned) over $600 in 2023, that income could have been distributed to the beneficiaries as part of the distributions during the tax year and the beneficiaries would pay any income tax due. A form K-1 would be issued by the trust which would be used by the beneficiaries on their personal returns.

Any forms K-1 received are entered in the "Wages & Income" section using the "S-Corps, partnerships, trusts" dropdown to find the "Schedule K-1" topic. When entries are made here they flow to the correct forms based on the K-1 boxes used.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

Mike9241

if income is being distributed you should expect to receive a k-1 from the trust. you need to contact the trustee.