Yes, I am a retired CPA/Tax Professional. Yes, I have used this approach in the past without issue. I am currently filing a return like this. Note, that's not an absolute guarantee that it won't generate a question by the IRS. This approach minimizes the potential by clearly disclosing what is happening on the return. Any agent that picks up the return should quickly see and understand what is happening. Technically the issuer of the 1099R is required to issue a corrected form but getting most companies to do that is nearly impossible. That said, I am 100% certain with this approach each return reflects the correct taxable income. This is the most important thing.
I don't think I can really be much help on your efile question for the 1099s. In my experience, Efile can be temperamental especially if there is something out of the ordinary going on in the return. It's just not very transparent when there is a problem. Fixing it can chew up a lot of time. As a result, in old school fashion, I avoid efile and use paper. I also thought I'd mention to you that many practitioners do not go through the 1099 dance (especially if there would just be a handful of 1099s). There is an argument that income in respect of decedent is not "nominee" income in the true sense of the word. The decedent never actually "received" the income since they were not alive to receive it. The estate actually "received' the payment, from the payor, not the decedent. (Note, by operation of state law, ownership of the right to "receive" payment actually transferred on the date of death to the estate or designated beneficiary. The decedent never had actual possession.) Practitioner's will often use the 1099 approach in cases where the income is passing directly to the beneficiaries. This accomplishes notifying the beneficiaries of income they must recognize in their return and eliminates the potential for the imposition of penalties to the estate/decedent for failing to notify the ultimate income recipient. This is not so much a problem if the income is being split solely between the decedent's final return and the estate. The executor/administrator makes certain all income is being picked up in a return, and appropriately disclosed as "income in respect of decedent", reducing the potential for a penalty. This is where the streamlined approach with no nominee Form 1099s works best.
