How do i handle interest from bank accounts and dividends of decease

[nosillo2]

The bank accounts still had decease name and ss# until end of year whereas they passed away mid year.  How should interest be handled after death?  An estate tax return will be filled but 1099 is with deceased ss# instead of EIN.

Secondly, the stock was not move to an estate account and dividends were under deceased ss#.  How can 2 quarters of dividends be reported under EIN?  The 1099 reflect deceased SS#.  The death was reported to company but paperwork could not be completed until court appointed representative,

Thank you

Ann

[AmyC]

You will have to do the extra work. Income received while they were living goes on their final return. Since you have interest and dividends reported under the social that do not belong to the deceased, you will have to make nominee entries for the estate amount.

You can create the 1099's from the deceased to the estate. See General Instructions for Certain Information Returns and checkout this TurboTax article to make it easier.

For the interest:  

1. Open your return to federal income
2. Select to enter interest income
3. Enter the 1099-INT
4. Continue
5. Select that you need to make an adjustment.
6. Enter the amount and select it is for someone else.
7. Continue
8. Done

For the dividends: 

1. Enter the 1099-DIV
2. When asked about uncommon situations, select I need to adjust these dividends (select the learn more link for additional help).
3. continue
4. Enter adjustment amount, select the learn more link for additional help
5. Select I received all or part as nominee

I am very sorry for your loss.

[nosillo2]

Thank you Amy!

A few more questions:

The dividends are split with estate tax return.  Should IRS be provided EIN? Should a note be provided with deceased tax return.

The interest goes to two individuals.  One account they were owners of account and other they were PODs. The interest on one is $4.02 and other $10.82 divided between two people.  The decease return was reduced by these amounts.  How are these handled?  Should the two people split and provide on their returns and provide note to IRS?

.

Ann

[AmyC]

1. Some places in the program, you can enter the nominee, the estate and the EIN. The IRS knows they are linked.

2. When e-filing, adding a note isn't an option.

3. For $15, I would put it all on the deceased return and save the hassle. The income is reported and the difference in tax liability for all 3 people is less than $25 each so the IRS will disregard the issue and allow it.

[nosillo2]

Amy, thanks again.

Where the dividends were adjusted, it does not provide location to provide EIN for Estate Account in Turbotax.  The payor was called and they will not separate the dividends into the two separate accounts.    It is about $1200 that should go to estate.   How can IRS be notified that the adjustment amount will be on estate tax return?  

I appreciate your help.

[AmyC]

The IRS knows the estate and social security name and number connection. The IRS requires the amounts be split  based on receipt of funds, living/ personal taxes or deceased/ estate. The IRS does not require  nominee forms be filed for this situation. 

Just put the remainder on the estate. If the IRS asks about either, you have the proof.

You are so welcome, I know how hard it is to do the estate return -emotionally. Best wishes!

[nosillo2]

Thanks Amy.  i have a few more questions regarding the 1041 if you are able to help.

I have a 1099-OID along with 1099-INT.  I put the 1099-int into estate Turbotax, but there is not an area to put 1099-OID information.  I have amounts under  Acquisition Premium and Tax-Exempt OID.  How should these be inputted into 1041 in Turbotax?

Secondly, there will be a loss on line 23 of 1041 after including the deductions.  Does the loss get carryforward or how is it handled?  

I appreciate your help.