Since your name is on the check for the interest income, you can distribute the income according to the original estate documents then use the nominee procedures on your tax return.
In TurboTax you do this by entering the 1099-INT, then checking on the next screen that you need to adjust the amount. You'll then be able to enter the adjustment amount and check the reason for the adjustment. If none of the interest income belongs to you, you can make an adjustment for the full amount.
Nominee Returns
When 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 recipients.
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 beneficiary 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.
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