On TurboTax (Sch B- Form 1040), how do I reduce the 1099-INT reported interest by the $ that relates to the period after taxpayer's death ($ reported on Form 1041)?

[DianeW · Accepted solution]

While you are signed into your TurboTax account (desktop or online) use the steps below to enter your interest and use only the amount earned after death.

1. Select Federal Taxes tab
2. Under Wages & Income select Interest & Dividends
3. Select Interest on 1099-INT
4. Follow the prompts to enter your Interest

You can also nominee that portion of the interest from the decedent to the estate return by following the instructions here. This will provide the 1099-INT to the estate as well and reduce the amount required to be reported on the decedent's final return.

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.

[cmoy]

so just to be **bleep**, if I am a nominee on a 1099-DIV and transferred a 1099-DIV over to my son, I wouldn't be able to use TurboTax at all?  Because it sounds like I need to MANUALLY send in a red copy of a 1096 by snail mail to the IRS, so as such I have to send the whole 1040, all 1,000 forms that I have generated, to the IRS.  Please correct me if I am wrong.

[PattiF]

You are still able to file electronically with TurboTax for your tax return.  The nominee is responsible for filing subsequent 1099-DIV forms. Here is a link to the Instructions for Form 1099-DIV (01/2022) | Internal Revenue Service (irs.gov)

Form 1096 is mailed separately and is the Annual Summary and Transmittal of US Information Returns.

[Edited 02/26/22 | 11:09 AM PST]

@gjo5 

[cmoy]

thanks!  So just to clarify, I send the 1096 separately?  Doesn't have to be part of the tax return and can be sent via US Mail on a separate date, say in May?

[cmoy]

and also, for the 1099 forms with regard to the Adjustments to Interest/Dividends section, should I specify the payer (me) and recipient (son) on my 1099-INTs and 1099-DIVs, only his 1099 forms, or on both my 1099s and his 1099s?

[DianeW777]

Yes, you send the 1096 and 1099s separately from the tax return.  The Forms 1096 and 1099 are not filed with the tax return. I wouldn't wait until May, they should be done as soon as possible because there is a filing date which is February 28th.

Complete them exactly as they appear on the originals except for the dollar amount and the payer/recipient.  Use the dollar amount that belongs to your son.

If the forms you received this tax season are all in your name then you are the payer and your son is the recipient for his portion of the income. You do not complete any forms for yourself only your son (if you name is on the original forms from the financial payer).

@cmoy

[Edited: 02/23/2022 | 12:23p PST]

[cmoy]

sorry, one more long-winded question (actually a few questions): 

so I have 4 1099-DIVs and 2 1099-INTs I am forwarding the entire amounts of all of those forms to my son, 6 forms altogether. 

So on the 1096, I would say "6" in Box 3.  What do I put in Box 1, employer ID number?  I am putting my own information, including social security number, in the 1096 form.  There's nowhere where I need to specify my son's info, specifically his SSN. And I will snail mail the 1096 form, along with the 6 1099-DIV TurboTax worksheet forms, in a flat envelope with the modified new payer (me) and the recipient address (which is the same as mine) at the bottom of each worksheet.  Is this all correct?  Does it matter if the 1096 form is black or red?

Also, it says on the 1096 form that the due date is Feb 28, 2023.  Just want to make sure that this is the correct form:  https://www.irs.gov/pub/irs-pdf/f1096.pdf

[DMarkM1]

Yes, the 1096 is only your information.  The red copy goes to the IRS.  Since you are not a business you leave box 1 blank and put your SSAN in box 2. 

The link you have is for the 2022 form which is due 28 Feb 2023.  Here is the link to the 2021 form which is due 28 Feb 2022.  

[cmoy]

thanks!  with regard to attaching the 1099s to the 1096, can I just send the TurboTax generated 1099-DIV worksheets, which would have the payer (me) and recipient info, or do I send in the original 1099-DIV forms from say Charles Schwab?  Giving my previous example, I'm assuming that in addition to sending the 1096 this weekend, I am sending in 6 1099-DIV sheets.

[RobertB4444]

You are just sending the 1096 and 1099s that you generated.  No need to send the original 1099 from Charles Schwab.

[cmoy]

would I be able to send the 1099-Div worksheets that are generated by TurboTax instead?  It sure seems like a lot of effort and upgrade costs just to create some sheets that have the same information in it.

[DianeW777]

No, however you can use the printed forms with the links provided below.  There is no additional cost and it will take very little time to complete a .pdf on the computer and print them out to mail. Don't be concerned if you don't have a red copy for the IRS.

Do not send any Charles Schwab statements to the IRS. Also, you can combine all dividends on one Form 1099 as well as interest.

• Form 1096-Transmittal
• Form 1099-DIV
• Form 1099-INT

You are the payer and your son is the recipient (just as a reminder).