|
|
|
Member
 
Group: Forum Members
Last Login: 1/3/2012 10:46:42 AM
Posts: 42,
Visits: 787
|
|
New clients.
Taxpayer died at age 75 with a substantial IRA account. In his living trust, he provided that the trust was to be the beneficiary of the IRA and pay it out to the surviving spouse over her lifetime. This sounds to me like it was supposed to be a conduit, or see-through, type of trust provision. And that RMDs should flow from the Bank to the Trust, and then out to the surviving spouse, with only expenses offset at the trust level.
But, the bank/trustee issued a 1099-R for the full balance of the IRA, indicating it was all taxable. That was for 2005. And the bank/trustee has issued regular 1099 forms for 2005 and 2006 as if the account was a regular investment account, showing interest, dividends and capital gains for those two years. I'm wondering why they didn't issue 1099-R forms for the RMD. I'm concerned that the bank thinks that the IRA was paid out in full in 2005.
Am I missing something?
bill downs
|
|
|
|
|
|
|
| Sounds like the bank transferred the IRA's assets from the IRA to a taxable account in 2005. You should ask to get the bank's statements or an account transcript for 2005.
|
|
|
|
|
Power Member
Group: Forum Members
Last Login: 3/12/2011 12:58:57 PM
Posts: 147,
Visits: 823
|
|
| There is a bad problem here. If the bank cashed out the IRA (looks that way) there is no way that it can be returned to the IRA. Only a spouse can do a rollover and the trust doesn't qualify. There are rulings where trusts were reformed after the date of death to make the spouse, not the trust, the beneficiary but that wouldn't be appropriate in your case. I think the trust owes lots of tax for 2005. You should find out who authorized cashing the IRA, maybe there can be an equitable settlement because the IRS cannot offer relief.
Mary Kay Foss
|
|
|
|