My Mom passed in October 2021 and I am preparing her Federal Income Tax return for 2021. My Mom lived in Florida and was single at her death.
My Mom had a few accounts at Banks and Mutual Fund Companies that reported interest and dividends for 2021. These accounts had transfer on death (TOD) designations associated with them. The TOD was for a sister of mine.
Question: Do I need to report on my Mom's income tax return the portion of interest and dividends that she received while she was still alive. That is, do I need to report any interest and dividends she received from January 1, 2021 to September 30, 2021)? Or. does the TOD, in this case my sister, assume responsibility for reporting the entire amount of interest and dividends, on the various accounts, when she does her return? Or, maybe some other scenario.
Please let me know if further clarification is required. Thank you.
I'm sorry for your loss.
For the TOD accounts, you should report on your mom's tax return interest and earnings up to the date of death.
Your sister becomes the owner of these accounts after the death of their owner and has to report interest and earnings from the date of death.