dividends and interest for deceased

[taxcurious2]

  I'm filing a 1040 tax return for my deceased mother.   There maybe is $165 of estate income post the

date of death, so no 1041 is required as it is under the $600 limit.

  How do I deduct the $165 from the income?  Should I deduct on the 1099-int and 1099-div as I enter, or use the actual values (maybe the irs matches those?) and deduct somewhere else?  or just pay the tax on the extra $165?  (probably about thirty or forty bucks or so).  

[Anonymous_]

In the income sections (for interest and/or dividends), check the box to indicate you need to adjust the taxable amount.

[Anonymous_]

[taxcurious2]

i saw that box, but i didn't realize that applies to the situation i'm in

[Anonymous_]

Right, because it is counterintuitive. 

Your mother is treated as having received the interest (the $165) that belongs to the estate as nominee for the estate.

[taxcurious2]

you know, now that you say this, it makes perfect sense to me now

thank you

[taxcurious2]

I have a followup question.  It seems to me that upon typing the adjustment, turbo tax automatically prorates the qualified dividend on 1040 line 3a.  It's somewhat mysterious in that the calculation seems invisible, but i tried a few numbers and i'm pretty sure it is prorating.  I'm not sure why I can't just put in the true amount of the qualified dividends which is different from the prorated number.

[Anonymous_]

Probably hard coded to do that, but you would have to resort to something like Forms Mode (not supported by online versions) to override it.

[taxcurious2]

not even forms mode on the mac overrides it, really hardcoded -- guess nothing one can do

[taxcurious2]

The only thing that seems to work is to change the qualified dividends number on the 1099B form until the right amount is shown on the 1040.  I'm hoping i can add a note of explanation.