Let's start with your question:
As Executor, I'd like to instead complete the return for Mom using only the income incurred while she was alive, with only mentioning nominee income as required to make things clear. The income belonging to the estate (after death) would be sent to the estate with 1096/1099s.
- Yes, you can and should do that. Only you know what was earned while she was alive and only that amount should be listed as income on her final return.
You could choose to use the nominee or simply enter the amount that should be included on her return, then include the remainder on the estate return.
There would be no repercussions from reporting this accurately. Keep all of your records to show how you arrived at the income for each return. Apportioning to the proper owner would be a good idea to actually nominee using the forms 1096/1099s without any additional action in the return.
Nominee information has been provided in your other post and placed here for convenience.
Nominee Returns.
Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received). You must also furnish a Form 1099 to each of the other owners.
File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)
- On each new Form 1099, list yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer. The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.
The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here:
Thank you for your patience.
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