Dividends were divided on decease tax return and estate tax return in Turbotax manually. The 1099 showed all dividends going to decease. There is no where in Turbotax to put EIN number on decease tax return, and an estate tax return will be filed. The payor of dividends will not divide dividends to respective account. How should this be handled with IRS?
Ann
No, stocks that were not sold but were distributed directly to beneficiaries do not need to be reported on a Form 1041. There is nothing taxable for stocks that were transferred directly to a beneficiary.
If the stocks were sold by the trustee/executor, then these sales would get reported on the Form 1041 and the gain (or loss) on the sale would get distributed to each beneficiary via a K-1 form. Do realize that any inherited stock has a basis value per share on the date of the decedent's passing.
The IRS understands the situation and is aware that providers don't break things up. As long as you enter the correct amount on each return, you are fine.
The IRS does have forms you can file, but those are really meant for passing income to another person. You could do a nominee for the dividends, General Instructions for Certain Information Returns. It is not expected in your position but if it makes you feel better, you could issue a 1099-DIV from the individual to the estate.
Are the stocks transferred to beneficiaries included in K-1 distribution? If so, is it included on Form 1041 or just added on K-1? Should a gain/loss be reflected?
On Schedule D Part III under 1 (beneficiaries) is blank should it be filled in with amounts reflected under Estate column so it can rollover to distributable income for schedule k-1 form?
Thanks
No, stocks that were not sold but were distributed directly to beneficiaries do not need to be reported on a Form 1041. There is nothing taxable for stocks that were transferred directly to a beneficiary.
If the stocks were sold by the trustee/executor, then these sales would get reported on the Form 1041 and the gain (or loss) on the sale would get distributed to each beneficiary via a K-1 form. Do realize that any inherited stock has a basis value per share on the date of the decedent's passing.