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Tax issues with 1099-Misc issued to a trust

Forum|Forum|5 years ago
July 21, 2020
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If properties are placed in a trust, should the rental management company issue a 1099-Misc to the trust or to the person reporting the income?

If a 1099-Misc is issued to a trust, could this create an obligation for a 1041?

Best answer by Anonymous_

@ljinit wrote:

Thanks, if the W-9 has the name of the trust but the social of the taxpayer, would this create any issue?

Is this a grantor trust? If so, and the trust uses the SSN of the grantor, then the trust is treated as a disregarded entity for federal income tax purposes and the income would be reported on the individual income tax return of the grantor.

A

Anonymous_

Employee

@ljinit wrote:
If a 1099-Misc is issued to a trust, could this create an obligation for a 1041?

Yes, assuming the income exceeds the threshold for filing (which is very low). This would also assume that the property management company was given the EIN of the trust.

L

ljinitAuthor

Thanks, if the W-9 has the name of the trust but the social of the taxpayer, would this create any issue?

A

Anonymous_Answer

Employee

@ljinit wrote:

Thanks, if the W-9 has the name of the trust but the social of the taxpayer, would this create any issue?

Is this a grantor trust? If so, and the trust uses the SSN of the grantor, then the trust is treated as a disregarded entity for federal income tax purposes and the income would be reported on the individual income tax return of the grantor.