Trust as beneficiary

[Guest JBS]

The beneficiary of Jane's IRA is listed as "John and Jane Doe Revocable Trust". The trustee of the trust (John) has requested a lump sum distribution (due to the relatively small amount). The custodian has requested the TIN of the trust. John's attorney has advised him not to obtain a TIN for the trust, but to use his own SSN. Is this possible?

While it might suffice for state law, I always thought federal law required the custodian to use the TIN of the trust for 1099-R reporting purposes.

[Guest b2kates]

I am going to give an equivocable answer. Normally, with a revocable trust, the grantor and trustee are the same individual. In that case it is appropriate, while the grantor is alive to use the grantor's SSN.

I do have a client who funded his trust and for tax purposes reports under the trust ID. This requires annual 1041 filings.

When there are more than one income beneficiary , I do not believe it appropriate to use an SSN, but that the Trust must have a TIN. This is to properly reflect where the taxable income is distributed.

Ultimately, this is a judgement call for the trustee.

[Mary Kay Foss]

The social security number is the correct number to furnish in this case. As long as the trust is revocable and the grantor is alive, that's what the IRS wants you to use.

I've had bad situations where the grantor used an EIN for trust investments in a revocable trust. The IRS wouldn't certify the W-9 and they withhold 30% tax from all income.