Doing taxes for deceased loved one. Turbotax let me separate dividends shown on 1099-DIV to subtract distributions that occurred after he died, which belong to beneficiary. It did not give me a way to set aside the capital gains distributed after he passed from the 1099-DIV which are also a nominee distribution for which beneficiary will have to include in their 2022 taxes. How can I get to this figure in TT and make the necessary adjustment and notes for IRS?
I am sorry for your loss. When did your loved one pass away?
Capital gains distributions are typically received in December so if the decedent passed prior thereto, the gains are taxable to the estate (or trust).
Thank you for replying. Passed in Sept 2021.
Unique situation and I was trying to stay brief. The capital gains are from a TOD account, therefore not included in the estate because it passes directly to beneficiary, who must pay taxes on them on 2022 taxes. I've carefully researched this.
Again, Turbotax lets me divide the dividends distributed after his death from this same fund's 1099-DIV. I must find out how to do so with the capital gains.
(Maybe I'll have to redo it all by hand. I've already spent hours & hours on a Merrill Lynch import issue other community members have documented for years and I couldn't solve either. Phone call to TT was dead end.)
Maybe I need to ask a more basic question. How do I get to the individual pages of the tax form itself, i.e. the individual schedule pages on Turbotax? I'm hoping I could edit there? Because according to the IRS pub for executors, I'll need to add notes about the divided dividends (explain putting total and subtracting the portion received by beneficiary, arriving at new sum) and now, I'll need to do the same for these capital gains.
Have to find a way forward. 🙂
In order to view individual forms and schedules, you need to use Forms Mode, which is only available in the desktop (installed) versions of TurboTax (not supported in the online versions).
For capital gains adjustments, you need to enter a code on Form 8949 (specifically, Code N for nominee).
See https://www.irs.gov/instructions/i8949#en_US_2021_publink59421zd0e1936
Thank you. I'll keep working on things today.
I purchased the download version of TT Premier, as opposed to online. Is mine the same thing as "desktop (installed)"?
Yes the program you buy and install from a download or CD is the Desktop program.
Oh shoot. It looks to me like the link/answer may be incorrect. "Nominee" on that IRS page refers to info reported on the 1099-B needing to appear on the 8949. I'm seeking info for how to handle capital gains referenced on a 1099-DIV.
I will look again after I eat. I did print one paragraph from that page to examine further. Admittedly I'm fried from working on his taxes for hours today. Turbotax didn't place the capital gains info from that 1099-DIV anywhere except on the "smart" worksheet for Schedule B. At least, I didn't find it elsewhere.
@colorfulcat wrote:
...I'm seeking info for how to handle capital gains referenced on a 1099-DIV.
Capital gain distributions reported on Form 1099-DIV are typically from the sales of securities within mutual funds and those distributions are virtually always late in the year (like late November or, more often, late November).
As a result, there is usually no need for nominee treatment unless the decedent passed after the reported distribution.
Yes, the CGs posted in December. But what I've read about distributions that appear on the 1099-DIV, is that anything which occurred after the owner's death is attributed to the beneficiary, not the decedent.
I've reread here, and as it did two days ago, it appears you wrote the opposite to me on Sunday. (I had to stop and work on my own taxes.)
I have to keep researching until I locate an answer. I did see someone else in the community struggled with this issue last year and I didn't find a clear-cut answer for how to properly record these figures in TT on their thread, either.
Apologies for not saying this last post: I do appreciate your efforts.
It's just that I will need to resolve this. If I can't get to the answer through the community, the way forward must be someplace, or there must be a way to improvise a solution.
And..... it's good that I've kept on wrestling with this! I believe I'll also have to divide out the interest earned before and after he died. I had missed that. Yikes!
It is a pain to have to do that, but those are the rules.
Thank you. Hoping someplace on the community another person has dealt with the CG issue.
Yeah, I have and am not sure of the issue.
The funds received after death are reported on the return of whoever received the funds. That is typically the estate or one or more of the beneficiaries. Since this was a TOD account, it would be reported on the return(s) of the named beneficiary(ies).
Yes, I know. I believe I stated this in my first post. But it's on the decedent's 1099-DIV, so I have to put it on his 2021 tax form and then subtract it, attributing the amount to the nominee (beneficiary).
That's the crux of my question: how/where to do this with the capital gains that appear on 1099-DIV? Turbotax helps me do this with the portion of the dividends appearing on the 1099-DIV that belong to the beneficiary.
Hopefully on the right track. Trying a different search. Reporting income with respect of the decedent. Sorry I've posted so much.
You are going to have to enter this on Form 8949 with the N code, but I do not believe TurboTax is going to support that entry unless you use Forms Mode.
If you received capital gain distributions as a nominee (that is, they were paid to you but actually belong to someone else), report on Schedule D, line 13, only the amount that belongs to you. Attach a statement showing the full amount you received and the amount you received as a nominee.
Unfortunately, I tried that document when you first shared the link a few days back and it doesn't seem to apply. The only spot where nominee is mentioned discusses figures that appear on a 1099-B. My question is about capital gains that appear on the 1099-DIV.
Quoting from the link you shared:
"You received a Form 1099-B or 1099-S (or substitute statement) as a nominee for the actual owner of the property"
Capital gains are capital gains.
In fact, a Form 1099-B merely breaks down the components of a transaction (which often results in capital gain).
Further, most of the larger brokerage firms issue consolidated 1099-B forms that include interest, dividends, and capital gain distributions.
Regardless, the instructions in the link I posted are fairly clear and not as I suggested earlier with respect to Form 8949 (unless you have other capital gains to report).
@colorfulcat wrote:Quoting from the link you shared:
"You received a Form 1099-B or 1099-S (or substitute statement) as a nominee for the actual owner of the property"
Here is the language in the IRS instructions from the link I posted:
....if you received capital gain distributions as a nominee, report them instead, as described under Capital Gain Distributions in the Instructions for Schedule D (Form 1040).
https://www.irs.gov/instructions/i1040sd#en_US_2021_publink24331id0e249
If you received capital gain distributions as a nominee (that is, they were paid to you but actually belong to someone else), report on Schedule D, line 13, only the amount that belongs to you. Attach a statement showing the full amount you received and the amount you received as a nominee.