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Level 1

How do I report interest for savings bonds for a deceased mother?

I cashed my deceased mother's savings bonds in December 2016. She had passed away earlier in 2016. She had not previously reported any interest accrued. Can I report the interest accrued on them to the date of her death on her personal return and then the interest from the date of her death to redemption date, on my return? If If use Turbotax Deluxe for both returns, where do I note the interest on each return and how do I reflect the 1099 Int that I received from the bank?

2 Replies
Level 7

How do I report interest for savings bonds for a deceased mother?

Yes, that is the correct way to report the income.  As you complete each return enter only the interest that applies to each return (do not enter the full amount on either return even if shown on the 1099-INT from the bank).

To go directly to the entry in TurboTax Deluxe desktop follow the steps.

  1. Log into your account 
  2. In the search box on the upper right type interest income
  3. Jump to interest income
  4. Begin to enter your 1099-INT
  5. Use the interest amount for the return you are completing
  6. Be sure to check the box for more items to see the savings bond box 3 (image attached)

Next, instructions are included for you to nominee the portion of interest that belongs to you from your deceased parent.

Nominee returns. Generally, if 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 other owners. 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.

  • On each new Form 1099, list yourself as the payer and the other owner, 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 here:  Click here to order forms or publications from the IRS.

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Level 5

How do I report interest for savings bonds for a deceased mother?

I have the same situation, but the non-matured bonds are POD to my 2 sisters and me.

The bonds have been transferred to our individual Treasury Direct accounts.

 

Treasury Direct will not issue a 1099 until the bond is redeemed. 

How do I enter the interest in Mother's final 1040 without a 1099?

 

What records do I need to keep to show that tax was paid on interest accrued up until Date of Death?