topic Handling of Income Generated after Day of Death in Investors & landlords

Handling of Income Generated after Day of Death

SOMD — Mon, 03 Mar 2025 01:46:35 GMT

My mother passed away in 2024. The 1099 received from her brokerage included all Div/Int income (before and after DOD). Based on my research, I believe the after DOD income should be included on the Beneficiaries tax filings. Is it required that 1099s be generated for each of the beneficiaries or can they just account for it without receiving a 1099. I am intimidated by the thought of filing an Information Return with the IRS and generating the corresponding 1099s. Any insights would be greatly appreciated.

Re: Handling of Income Generated after Day of Death

DavidD66 — Mon, 03 Mar 2025 02:04:50 GMT

Only income received prior to date of death is reported on the tax return for the deceased. Income generated by assets of the estate of the deceased (i.e. income received after death) if greater than $600 is reported on Form 1041 - U.S. Income Tax Return for Estates and Trusts. If it is $600 or less, I suggest you simply add it to personal returns of the beneficiaries.

If you need to file Form 1041 you can do so with TurboTax Business Software: TurboTax® Business Desktop 2024-2025

Re: Handling of Income Generated after Day of Death

SOMD — Mon, 03 Mar 2025 02:50:16 GMT

The issue that that I did not mention is that because we did not open an estate because all of the assets had designated beneficiaries and there were no substantial other assets. In PA, you can handle these type estate in a streamlined fashion without "opening and estate". From what I found during my research you do not have to file a 1041 even though the income is over $600. You are supposed to handle it by addressing the income on the beneficiary's taxes. That is why I was asking what is the easiest way to deal with it on the beneficiary's taxes (after deducting it from my mother's taxes).

Re: Handling of Income Generated after Day of Death

PatriciaV — Tue, 04 Mar 2025 20:48:22 GMT

While you can provide the beneficiaries with copies of the original Form 1099-S with instructions on how to report the income on their individual tax returns, separate 1099's should be provided with the split income already calculated. You may be able to use TurboTax Quick Employer Forms (QEF), a service we offer to customers who use the TurboTax Business, TurboTax Premium Online, and TurboTax Home & Business. This free service includes Form 1099-INT.

For more information: What is Quick Employer Forms?