Have a client who's mom passed away in 2015.
Her home was transferred to trust in 2015. Only asset in trust was home, not a rental and no income generated from 2015 through 2019, so no 1041 required. Client and brother kept up on maintenance of home from their own personal funds.
Home was sold in 2020 and 1099-S was issued in the name of the Trust but with Client and his brother's SSN as Tax ID for 50% of the gross proceeds each.
Question: Should they get it corrected to reflect a trust EIN (I don't believe EIN exists yet) file a 1041 and issue a K1 to each of the bene's for the sale of the home.
or
Can we forego all that and just amend their 2020 indivicual returns, report it, pay the tax and move on.
What would you do or what would you advise?