Decedent's tax return

[AnnHW]

I'm preparing a 2025 income tax return for someone who died in July, 2025. His bank's 1099-INT states the full year's total interest. Should I reflect on the decedent's income tax return only the amount ($75) earned before he died (even though it will differ from the 1099-INT), and the remainder ($157) on his estate income tax return? A slight wrinkle is that his estate's income at the end of 2025 is well below the $600 income threshold, so I think I won't actually need to file an estate income tax return. I appreciate any advice you can give me.

[pk · Accepted solution]

@AnnHW , assuming you are legal representative of the decedent,

(a) his final tax return should cover the all incomes in his name for the  calendar year 2025.   While it is true that the estate came into being post the passing of the decedent, the  informational forms like 1099s will probably all have his SSN and so it is  correct to  include all these in his final return.

(b) sale of assets that are done by the  Estate , with its own tax id  ( EIN ) should be generally recognized in the  tax return of the estate or sometimes  passed / taxed at the inheritor level.  Depends on the  size of the estate and /or  plans  of the estate/ inheritors.

(c) you probably also have to file a form 1310, as the representative, to receive any tax refunds ( in the name of the decedent), unless there is a spouse involved.  If there is a spouse, then he/she still can file MFJ

Is there more one of us can do for you ? 

[M-MTax · Accepted solution]

Technically, you should split the interest; interest earned before death and interest earned after death.

The interest earned before death obviously is reported on the decedent's final return while the interest earned after death is Income in Respect of a Decedent and is reported by the recipient of that share, whether it be the estate or an individual or individuals.

Frankly, for the small amount of interest earned ($157) it's probably more straightforward and easier to just report the entire amount on the decedent's final return.

[AnnHW]

Thank you so much for your very helpful answer. Yes, I am the legal personal representative. I have one more question, if I may.  The decedent received a 1099-R for the gross distribution of final payouts from two annuity contracts plus an RMD payment from a retirement account; it also reflects federal and state income taxes withheld.  I am the named beneficiary of all of the accounts. The distributions occurred after death, so the payments were made to me. I don't know what to do with the 1099-R issued to the decedent. 

Thank you!

(P.S. I tried for 3 months to find a tax expert to handle this stuff, to no avail. Hence my questions.)

[M-MTax]

That is the same, @AnnHW; it's IRD and should be reported on your return. 

There's usually a Code 4 in Box 7 (for death). 

[AnnHW]

Thanks very much for your reply!

[M-MTax]

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@AnnHW wrote:

Thanks very much for your reply!

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No problem but you marked an answer that has erroneous information as the accepted answer. It is NOT correct to say, "1099s will probably all have his SSN and so it is correct to include all these in his final return". 

Again, that can be done but it is NOT correct. The correct method is to split the interest earned into two, reporting the first on the decedent's final return and the other treated as IRD and reported on whoever receives the income after death.

[AnnHW]

Thank you for clarifying and I apologize for my mistake. I don't know how to unselect the incorrect answer as a best answer. But I just selected yours as a best answer.