I am trying to allocate a nominee distribution for a 1099-DIV on a decedents tax return. I have applied an adjustment on the dividends based on ordinary dividends received after date of death. However, when reviewing the Schedule B, the amount for the Nominee Distribution on line 5 is not what I entered. A portion of the amount has been applied to line 2a - capital gains distributions on Schedule D. Schedule D, line 13 shows a lower amount than I entered for the 1099-DIV and there is a related explanation statement showing the nominee distribution for capital gains for that line. The Schedule B and Schedule D nominee distributions do add up the amount I entered.
In this particular case, the capital gains distributions were received in the account prior to date of death and there is no nominee distribution. I tried to override it but got an error that line 13 should not be overridden.
I cannot find any reasoning to this allocation in the IRS instructions? Why is the adjustment that was entered allocated against both items (ordinary dividends and capital gains distributions)? How is the allocation calculated?
