1099R, Estate account

[user17720250883]

If my sister passed and I am her only beneficiary and the executor of her estate, how do I handle her tax return. I have already filed mine and after reading some of these post it sounds like I may have to amend mine.  I opened up an estate account with EIN for my deceased sister.

I received one 1099R (50K) with my name and ss because I was her beneficiary. I filed that one on my return.

I received her SS statement and another 1099R with her SS and I assume that goes on her final return.

I received a 1099R (26k) that has estate and beneficiary (I am the only one) and the EIN on it. 

1, What return do I file this on? My personal? which is going to be an amendment if so, or her final 1040

Or do I have to file a tax return for an estate?

2. If I have to do an estate account with only 26K 1099r to claim, do I have to create a k1 and file that on my personal one?

3.  And can I deduct any expenses I paid out of it?

Thank you so much to whoever can help me with this complex question.

[DianeW777 · Accepted solution]

A return will be filed for your sister as her final return with the social security income and the 1099-R in her name. This should represent the only income she received before she died.

You will amend your tax return to include any income from the 1041-K1.

Since you did obtain and EIN for her estate, you should file a Form 1041 since there is income of $600 or more for the estate. This return is where you will deduct any allowable expenses

• On an estate income tax return (IRS Form 1041), you can deduct necessary administrative expenses, including legal fees, accountant/return preparer fees, executor commissions, and court probate costs.  Examples:
  • Professional Fees: Attorney, accountant, and tax preparer fees for preparing Form 1041.
  • Fiduciary Fees: Commissions paid to the executor, administrator, or trustee.
  • Administrative/Probate Costs: Court filing fees, inventory fees, and appraiser fees.
  • Property Maintenance: Costs to maintain, conserve, or manage estate assets (e.g., insurance, upkeep on a rental property before sale).
  • IRS Form 1041 Instructions

If you want to avoid filing an estate return, and the Form 1099-R is the only income for the estate you can choose to nominee that income from the estate to yourself since you are the only beneficiary. In this situation the expenses would not be allowed on your personal return.

Nominee Returns.  This is how the IRS knows what you are doing.

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. (Provided on the Form 1096)

• On each new Form 1099, list your sister's estate as the payer and you, as the recipient. On Form 1096, list sister's estate 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 (use the form(s) needed) so if you don't have a color printer, go to the IRS website to fill in and print the forms here: : 

• Form 1096
• Form 1099-R

[dmertz]

I don't see where the nominee process would be of any benefit, if it's even permitted.  Wouldn't doing a nominee of the income still require filing Form 1041 to remove the income from the estate?  The IRS still receives the original a Form 1099-R showing this as income to the estate which needs to be reconciled on the estate's tax return.

Also, I suspect that the Form 1099-R shows user17720250883 as executor, not as beneficiary.  The payer has no business knowing anything about estate beneficiaries.

[user17720250883]

Thank you so much. Can a 1041 be filed efile or is it form fill.

[AnnetteB6]

Form 1041 can be electronically filed.  You can use TurboTax Business to prepare the return and file it electronically or by mail.

See the following link for more information:

TurboTax Desktop Business

@user17720250883