Deceased Taxpayer's Final 1040

Forum|Forum|2 years ago
March 22, 2024
1 reply
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I am preparing the final 1040 for my mother and am unsure about the reporting of a brokerage firm's Consolidated 1099. My mother died in 2023, and the assets weren't distributed to the heirs' accounts until more than three months later. The brokerage firm included all income (interest, dividends, and sales proceeds) for this three months on her account, even though it was notified she had died a week after she passed. Should I just include these items on her final 1040? Do I need to find a way to segregate the pre-death and post-death amounts so they can be divided between the 1040 and an estate tax return?

MarilynG

Level 15

If the broker's 1099 form is in your mother's name, you can report all the income on her final 1040 return. No need to separate pre and post death amounts.

Here's more info on Filing a Final Return for a Deceased Taxpayer, as well as an article on Death in the Family you may find helpful.

Sorry for your loss.

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Scanner2Author

Level 2

I was hoping I could include it all on her final 1040, and I appreciate your quick response.

The only reason I even thought to ask the question is that the 1099-B has a LT transaction showing a purchase of a bond on her exact date of death and a sale date coinciding with when the heirs' accounts were established. Will this cause a problem?

DianeW777

Level 15

It will not cause a problem and you can make the choice. The cost basis for the heirs would be the value on the date of death (same as her cost since it was the same day), which is when it was purchased. The heirs will use the cost basis on the date of death, it's unlikely that there would be much gain on either return.

The sale on your mother's final return will be virtually the same as on the return of the heirs.

@Scanner2

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