Interest income received in 2025 for an estate that filed final 1041 in 2030

[ron6612]

I received this note from David on 2/19/25. My additional question relates that most of the interest income from unclaimed property was earned prior to mother’s passing but some of it was earned after her passing in 2020 and the entire amount will be reported on a 1099 with her social security number and not the estate ein number in 2025. 

I received a check that included 1099 interest income in 2025 for my mom who passed away in 2020 and in which a final 1040 and 1041 trust income return was filed. The payer, NJ Unclaimed Property says that the 2025 1040 will go to the social security umber of my mom and that can’t be changed. The IRS said that the 1099 should go to the estate ein number and another final 1041 should be filed for 2025. But, NJ won’t change it for 2025 tax reporting. The interest income is $5,000 and legal expenses are $3,500 (which would be deductible on 1041).  What do you think?

‎February 19, 2025 6:17 AM

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 DavidD66

Expert Alumni

 

You should file an amended 2020 Form 1041 and include the interest and the legal fees.  You do not file a personal tax return (Form 1040) to report income received after death.  Another option would be to report the interest income on your personal tax return (if there are other heirs, you would split it).  You wouldn't be able to deduct the legal fees.  The former is the correct way (amended 1041), the later a CYA way to ensure the income is reported.  

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‎February 19, 2025 6:31 AM

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ron6612

Level 5

 

Thank you. Yes, the irs said to just file another 1041 showing only the new income and expense. However, the 1099 would be to the ss number of my mother not the estate ein number?.

‎February 19, 2025 6:37 AM

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 DavidD66

Expert Alumni

 

You don't need to worry about the EIN on the 1099.  It is for a deceased person and the amount is not significant.  It will go unnoticed by the IRS.  And if it were, you would be able to show that it was reported on the amended Form 1041.  And if your mother were alive, the amount, $5,000 would be below the filing threshold, so they would expect a return to be filed just for that.  Just report the interest on the 1041 as if you didn't receive a 1099.   

[ron6612]

Correction: final 1041 filed in 2020. Have read that statute of limitations is 3 years from when first final 1041 was done for 2020 in early 2021. Important to emphasize that there is 5000 of interest income and 3500 of attorneys fees. The income will be reported by NJ to social number of mom who passed away in 2020. Do not want to report to my social number. Want to take deduction and report to estate EIN number on 1041 but not sure if it should be amended with 2020 date or just marked as final for 1041 for 2025. 

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[ron6612]

Was hoping to get answers to last question. Also, is it ok to file the 2025 1041 with the notes and have the fiduciary mail the check with taxes due and noting on check ein number of estate and the words 2025 1041?