Our mother died in June 2020, and my brother and I were 50/50 beneficiaries of a TOD brokerage account. It took about 3 1/2 months to transfer the account to two separate accounts, one in each of our names. During that period, dividends were paid and some scheduled stock sales were completed. In February, we received a single 1099-C in my mother's name from the broker. It covered the period from January 1st, 2020, to September 8, the date the account was divided and transferred to each of us. The broker says they will not split the amounts into separate 1099's for beneficiaries. They will issue only one 1099 per account. I can easily separate the sales and dividends from the date of death, and can calculate the stepped up basis, but turbo tax is not clear on how to enter the income into my tax return.
To report my mother's income, I imported her 1099C into turbo tax and adjusted the gains and dividends received after her date of death to show they belonged to someone else (TOD beneficiaries). This seems correct following the turbo tax guidance.
But I'm stalled trying to decide how the my brother and I each report the income from my mother's 1099 for which we are responsible.
Do we report our mother's entire1099 in our tax returns, as if we were paid by the broker, and adjust the sales/dividends to reflect the share for which we are responsible?
Or do we consider my mother the payer, and simply calculate and report the gains/dividends for which we are each responsible, as if we had received an individual 1099?
Turbo Tax is guidance is unclear (at least to me) as to the proper way to do this.
The TOD account was the only significant item to deal with in our mother's estate, as she had consolidated her savings, sale of house, etc., into one account when she moved into assisted living. Consequently, we did not probate, or have a court appointed personal representative.
