1099-S income in FEIN of trust or estate - who must file?

[DexEA]

Brain is tired! An extra form in the clients drop off this year, forgot to mention - by the way........

Father died and kids sold his house so there is a 1099S but it is in the name of "XXXX, Trustee, of the XXX XXXXX Irrevocable Trust". The number is a FEIN, not the clients social security number. Wouldn't this need to be reported on a Form 1041? If it is it is already late, is it possible to report on the child's tax return?

[Burke]

No, it goes on the trust's return form 1041. What does the trust document say about distributions? It was an irrevocable trust you say, so it was owned by the trust when it was sold. The trust would pay any taxes on gains. Unless the trust document indicated monies were to be paid to children, then it may pass through to them. Is the trust terminated? Or does it continue?

[DexEA]

No, it goes on the trust's return form 1041. What does the trust document say about distributions? It was an irrevocable trust you say, so it was owned by the trust when it was sold. The trust would pay any taxes on gains. Unless the trust document indicated monies were to be paid to children, then it may pass through to them. Is the trust terminated? Or does it continue?

Thanks Burke, I was hoping you might be browsing the board. I don't know anything! I'm not sure they know, I think that is why they dropped it off and RAN out the door before I saw it! I just noticed the numbers as I was inputting information and thought oh-oh! I'm not sure when the Father died, but if they sold the house soon after there should not be any gain as FMV should be pretty close to selling price. But a 1041 will still need to be filed, correct? If the 1041 needs to be filed, it should have been file by 3/15/2012, correct?

I am just tuckered, even the obvious seems unclear!

[Burke]

No, trusts are calendar year returns. So due date is 4/15/13. But you can file an extension. Do it, and relax......don't even touch it without the trust document in your hands first. If money was distributed to heirs in 2012, you will probably have to file extensions on them too.

[Burke]

I'm not sure when the Father died, but if they sold the house soon after there should not be any gain as FMV should be pretty close to selling price.

I kinda hate to bring this up, but if the house was in an irrevocable trust, it doesn't matter what the FMV was at the father's death. It doesn't get stepped-up basis. Basis is donor's original cost plus improvements less any depreciation at the time it was transferred into the trust.