Deferred Annuity paid to a trust following my mother's death

Forum|Forum|1 year ago
February 14, 2025
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My Mother passed away on June 6, 2024. She had a deferred non-qualified annuity which was paid in a lump sum to her trust with her Trust's EIN#. I received a 1099-R which shows the gross distribution amount, taxable distribution amount, federal tax withheld and state tax withheld. I don't see how I report this in Turbo Tax or on the trust tax return (Form 1041). Do I enter the taxable amount as Other Income? Where do I enter the federal and state withholding. The distribution should be reported on K-1s for my sister and I (50% each).

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Best answer by dmertz

The taxable amount is to be reported on Form 1041 line 8 as Other Income. If passed through to trust beneficiaries, this Distributable Net Income is reported in box 5 Other Portfolio and Nonbusiness Income, on the beneficiaries' Schedule K-1.

Federal tax withholding goes on Form 1041 line 14. The tax withholding cannot be passed through to trust beneficiaries. Any refund is payable to the trust.

dmertzAnswer

Employee

Federal tax withholding goes on Form 1041 line 14. The tax withholding cannot be passed through to trust beneficiaries. Any refund is payable to the trust.