Trust Sale of Home Reported 1099S to Bene's

Technical topics regarding tax preparation.
#1
TaxCut  
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California
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?
 

#2
Doug M  
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I am wondering out loud if the attorney transferred the ownership of the house to the 2 bene's and they are the actual sellers.

If so, the 1099-S is correct.
 

#3
TaxCut  
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I thought the same thing, but the 1099-S was issued in the Trust name.

Wouldn't it have been issued in the individuals names?
 

#4
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Check deed upon sale...the Trust should have obtained a separate EIN at death, if not prior (depends on type of Trust). Initial thought is it would be inappropriate for lawyer to transfer deed to beneficiaries and bypass Trust, but I'm finding more lawyers doing crap with Trusts and Estates that do not have a clue.
 

#5
Noobie  
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They issue it to the person who received the funds.
 


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