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Old 10-30-2014, 11:30 PM
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Payors of interest/div. need to use the identifying number of the person to whom the account is payable in reporting interest on Form 1099. If the interest is payable to an estate/trust, under Rev. Rul. 64-99(a rev. rul. has the force of law), the administrator/ executor must furnish the trust’s EIN#, not the his SSN# to the brokerage firm, the payor.
(Note; I do not exactly know what the trust situation is; however, as said, any trust that has more than $600 of income needs to file an annual tax return, except some irrevocable trusts classified as grantor trusts which do not have to file a return as long as the grantor reports all the income and expenses of the trust on his or her 1040 in his SSN#. If the trust was set up by the father, he would be the grantor and he is now deceased and I assume no longer filing a tax return, you probably need to file a return, form 1041, for the trust in the tax ID, EIN#.



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Old 10-31-2014, 06:54 AM
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Wnhough, everything you say is true and I agree 100%. My problem is the brokerage that issues the 1099 is telling me that they will issue the 1099 using the deceased social security number, not the trust's tax id number that became valid when the person died. So when the IRS sees that a 1099 was issued under the decedent's social security number then it will create many problems.



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Old 10-31-2014, 08:13 AM
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Quote:
Originally Posted by FBN2014 View Post
Wnhough, everything you say is true and I agree 100%. My problem is the brokerage that issues the 1099 is telling me that they will issue the 1099 using the deceased social security number, not the trust's tax id number that became valid when the person died. So when the IRS sees that a 1099 was issued under the decedent's social security number then it will create many problems.
As the individual affairs of the grantor and the trust are treated differently, the irs must have a way of identifying the two. A tax ID allows the IRS to distinguish between the grantor’s final income tax return and the affairs of the trust..Irrevocable trust is a taxpayer, and may receive Form 1099 from certain assets for reporting on the trust tax return Form 1041. When preparation of trust tax return Form 1041 is complete, a tax information letter Form K-1 issues to trust beneficiaries for inclusion in any personal income tax return the beneficiaries must file;Basically, the Brokerage House needs to correct account; You should have no problem with the IRS.I guess the problem is that the IRS may not recognize that the income was reported to a dead person. While the correct thing is to report it on the 1041 the IRS has documents that show it should be on a 1040 so you may want to do and MAIL a paper 1040 with a cover letter explaining the situation. Its technically incorrect but it gives them info that they won't otherwise have. Since the trust was set up with a federal tax id number, it would be to file the 1041 to report the income.. You received 1099 and aslongs that 1099 listed the federal ID number, than you have to report the transaction on the Form 1041. Since however, the deceased's social security number is on that 1099 , then you'll have to file another 1040.Either way, my understanding is that the trust needs to be closed and a final tax return submitted. You may contact the IRS on the issue for more info in detail.



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Old 10-31-2014, 12:20 PM
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Thank you, a letter explaining the situation to the IRS should work out.



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