Divs and foreign tax paid on 1099DIV to Rev Trust of deceased husband?

[jklcpa]

My client's husband died in early 2011 and he had a revocable trust that the wife was the beneficiary of. The wife transferred all of the stock holdings into her name in mid 2011. The trust primarily had investments in foreign stock. FF to 2012 when one foreign company paid out dividends to stockholders of record from either 2010 or early 2011.

The 1099-DIV is in the name of the deceased husband's trust using his social security number and it also has foreign taxes paid on it. Since the wife ended up with the dividend income I don't have a problem reporting this amount on her return, but what about the foreign taxes? Will this automatically generate a notice since the IRS won't be able to match up the amount reported on the return with the 1099s?

[ljwalters]

Do a return for the trust and if will flow to her on the K-1

[jklcpa]

Do a return for the trust and if will flow to her on the K-1

No, a rev trust is a grantor trust and does not file a trust return. The income is reported on the grantor's tax return. At this point there is no trust, the estate work is completed, there is only this one dividend.

[joanmcq]

Doesn't the revocable trust become irrevocable upon the death of the grantor?

[jklcpa]

Doesn't the revocable trust become irrevocable upon the death of the grantor?

Yes, it would if the trust still existed at the time of the grantor's death. I had the date of the transfer to the wife wrong in my original post above. I checked my file and the reason no filings for an irrev trust were done was because at the very beginning of Jan 2011 and before any activity took place as far as dividend payments or any sales transactions, the husband transferred his entire stock portfolio into his wife's name, including this one managed portfolio of foreign stocks that made up the entirety of the assets in the rev trust. He died in mid April, 2011, so at the time of his death, the rev trust no longer had any assets and had no activity for 2011 belonging to him to report. That is why there was no K-1, and why I asked the question. The div paid in 2012 was for stockholders of record sometime in 2010.

Sorry for the confusion. Just to add, they did all this completely on their own without consulting any attorney or any of their advisors that I know of.