Question

I am the sole beneficiary of an Inherited IRA in a Trust with my late mother's name. How do I declare the RMD?

Forum|Forum|3 years ago
June 23, 2022
2 replies
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I have a feeling, from reading @dmertz replies to other related questions, that it is the estate that pays the taxes and that the payments to me from the estate are not taxable because it is an inheritance?

I assumed I needed to report the income and include a K-1 issued by the trust.

I have been trying to figure out what line on the K-1 form to report the income for the Trust to give me.

My brother (the fiduciary) sent me the Required Min Distribution from mom's IRA. We didn't have to deal with this the year she died because it was 2020 and there was no RMD that year for anyone. But now I'm having to figure this out.

He sent me a check from the IRA in 2021.

Thank you for guidance. I do have the business level of TurboTax.

N

NCPERSON1

@Leaminda - if you received a K-1 and enter it into Turbo Tax, Turbo Tax will figure that out for you.

If you look at the IRS version of the K-1 , it explains each line item on the K-1 and where that is mapped to on Form 1040. read the 2nd page of the link below:

https://www.irs.gov/pub/irs-pdf/f1041sk1.pdf

are you the beneficiary of the IRA or is the Trust the beneficiary of the IRA. If the latter it could be that the Trust reported the income and paid the tax; you may not see it on the K-1 - so I kinda agree with what you are thinking.

Did the administrator of the Trust provide you with the K-1?

L

LeamindaAuthor

Thank you for your replies.

I did not receive a K-1. I think my brother is supposed to create it and send it to IRS and myself that but didn't and I am trying to get that done. And, I was confused as to which box to fill in the RMD amount. DMertz said box 5 and that does look right.

Should I pay the tax or the estate?

I inherited the IRA and my brother is in charge of it. It has to take a taxable RDM every year and be fully out of the IRA within 10 of her death.

It is being privately held at a major brokerage, but I did not receive any tax forms.

N

NCPERSON1

@Leaminda - you really need to wait on the K-1; it is the Trustee's responsibility to create it and send it to the IRS and you. I wouldn't guess on what goes on it; it has to tie to the K-1 that the Trust generates.

For example, that RMD, were the taxes already withheld by the brokerage (which is typical) which would affect how the RMD, which is income, and the credit for the taxes paid would reflect on the K-1. Could be that the RMD doesn't belong on the K-1 and what you received net of the taxes already paid. Just a lot of mysteries created by guessing.

Better to spend the time and affort convincing your brother to complete his fiduciary responsibility and issue the K-1. It was due to you by March 30. Does he have an accountant doing it? that would make it easier.

D

dmertz

Employee

If a trust and not your mother's estate was the beneficiary of the IRA, your mother's estate is not involved. Since your brother as trustee of the trust, not the IRA custodian, sent you an amount equal to the RMD, it seems that the trust, not you, is the beneficiary of the IRA. Regardless, as NCperson said, enter the Schedule K-1 (Form 1041) as received. It's likely that box 5 shows the taxable amount of the RMD distribution (likely your entire RMD) which passes the tax liability for that through to you. TurboTax will include this amount on Schedule 1 line 5 and Form 1040 line 8 as income on your tax return.

If the Schedule K-1 shows an end date in 2021, this goes on your 2021 tax return. If it shows an end date in 2022, it goes on your 2022 tax return instead.