1041 Estate filijng for 2023; how to handle a 2023 1099-R with deceased SSN

[MLHalladay]

I am filing a 1041 on behalf of my sister's estate, as Qualified Executor. During January 2024, I received a 2023 1099-S for sale of her house, using the Estate EIN; I knowhow to handle this in the 1041.

The only other document received is a 2023 1099-R issued by her retirement pension provider, which uses my sister's SSN. This 1099-R amount represents her final pension payment, which was received via direct deposit to her credit union checking account on 12/30/22. The pension agency provides each monthly payment 'in arrears'; such that each month of her 2022 payments is deposited early in the following month. For December 2022, this would have meant receiving the payment in early January 2023; but the practice of this agency is to deposit the funds in late December. Following this practice, the funds were deposited on 12/30/22 into her credit union account.

Note that I prepared and filed 2022 Federal and State tax returns on behalf of my sister, using 2022 1099s received from her payers in early 2023. I indicated she was deceased in 2022 in these returns.

My question: Can I use this 1099-R in the 2023 1041 I'm preparing (with my sister's SSN)?  Or,
 1) should I request a corrected 1099-R from her retirement agency, which uses the Estate EIN number?; or

 2) do I have to submit a revised 2022 1040 for my sister? (..this implies it is ok to use a 2023 1099-R as the reason I am submitting a revised 2022 1040; can this be done?); or,

 3) should I prepare a 2023 1040 using her SSN, with the 2023 1099-R from her pension agency as the only payment? Note that TurboTax is not allowing me to do this, as I reported her death with the 2022 1040 tax return.

Thanks for any insight on this issue.   Mike

[ThomasM125 · Accepted solution]

 The pension income receive in 2022 should be reported on that tax return, so you will need to amend that return to include the December payment if you didn't enter it on the 2022 tax return. You can request that the pension company amend the 2023 Form 1099-R as it is incorrect, but they may not want to do so. If not, keep it on file in case the IRS inquires about it so you can explain what happened. You should not prepare a 2023 form 1040 as the taxpayer was deceased that year so any income received in 2023 would belong to her estate. I am sorry to hear of your loss.

[MLHalladay]

Appreciate the reply, ThomasM25, and your kind condolences; thanks.

Your view that I should amend my sister's 2022 return makes sense, of course, as the funds were deposited when she was alive. In thinking through the process, it should be simple to add in the numbers from this 2023 1099-R & file an amended 2022 return; but will the IRS flag the amended return because they can't match numbers to 2022 1099s? If this is not seen as a problem, I will go with this. What do you think?

Thanks, again, for your reply.   Mike H.

[PatriciaV]

Yes, reporting the 1099-R income for the tax year it was received (2022) is consistent with IRS cash-basis accounting. As ThomasM25 said, retain all documentation in the tax file in case the IRS has questions.

[MLHalladay]

I appreciate your reply, PatriciaV. It took me a couple of phone calls into the customer support folks at the pension provider to assure that the 2023 1099-R did indeed represent funds received in calendar 2022; but I'm now convinced, and will retain documentation. Thanks.   Mike [PII removed]