How to divide interest income between 1040 and 1041 in year of death

[knussml1]

Revocable trust grantor passed in 2023.  How is interest income divided between individual's 1040 and trust 1041 returns.  Must income be allocated to individuals 1040 if earned but not paid prior to death?  Likewise must income earned after death be reported on 1041?  Cash or accrual accounting?  1099-INT reports income for the entire year assigned to either the grantor's SSN or trust EIN.  Neither allocate.  Can/should income paid after death be reported on 1041?

[DianeW777]

Yes, any income earned after death goes on Form 1041.  Only income before death goes on the tax return of the deceased.  

If an estate tax return is not required because the income is below $600, then the beneficiaries can claim the amounts received after death.

[knussml1]

So must interest income be calculated between the date of death and the paid date for reporting on 1041?  No distribution from irrevocable trust in 2023 so no K1.  Tax paid by trust.

[PatriciaV]

Yes, you may allocate the interest income evenly over the entire year (divide by 12 times the months before and after death). Or if you have a statement close to the date of death, you can use the interest paid up to that date for the 1040. 

However, as DianeW77 says, if the trust received less than $600 of income in total for the year (including the interest income) and won't file Form 1041, the trust amount may be reported by the beneficiaries.