topic CD Interest should be attributed to Mother or her Estate? in Get your taxes done using TurboTax

CD Interest should be attributed to Mother or her Estate?

Papabair — Fri, 07 Feb 2025 16:17:59 GMT

My mother had 2 CDs when she passed away in 2024. The CD's were closed and the proceeds where added to her account and then the account was closed, and the funds were moved to her estate account, which was eventually probated.

Her 1099-INT from the bank included the interest for the CD (which were closed a few weeks after her death).

Should the interest be included on her final tax return or should some/all be included as part of her estate?

Re: CD Interest should be attributed to Mother or her Estate?

AmyC — Fri, 07 Feb 2025 18:15:23 GMT

Two part answer because you have two issues - the forms itself and where to report what.

1. The part earned while alive should be on her return and the rest on the estate. However, she may not have earned the interest at that point if she had not died. Then you could argue it is all part of the estate since it was transferred and interest received after her passing.

2. Another factor is the estate or her SSN on the 1099:

if it is the estate, I would put it all under the estate.
If it is her SSN, then you will need to:
make the estate portion nominee on her personal tax return -create a 1099-INT for the estate from her, see General Instructions for Certain Information Returns

I am very sorry for your loss.

Re: CD Interest should be attributed to Mother or her Estate?

Papabair — Fri, 07 Feb 2025 18:35:45 GMT

Thanks.

The interest was paid due to death (the CD has not yet matured). The 1099-INT shows her SSN.

Her medical expenses more than offsets any income she had in 2024 by a lot (she hasn't had to pay taxes in years). This $4k would represent almost 100% of the estate income. Without this amount, the estate income isn't close to the $600 filing limit requirement.

Looks like I will have to do an Estate return.

Re: CD Interest should be attributed to Mother or her Estate?

AmyC — Fri, 07 Feb 2025 18:41:35 GMT

That is frustrating. The estate return isn't hard to do with our TurboTax Download for Business but filing the 1099 will also require Employer Forms to file with the IRS.

Get the 1099 handled now and then work on the estate return after the personal.

Best wishes and let us know if you need any more help.