POD Beneficiary Claim - Mutual Funds

[myTax]

My mom passed away this summer and left me as the beneficiary of POD bank accounts as well as POD Mutual Fund.  According to Mutual Fund companies, they only report long term Capital Gains, short term Capital Gains, Dividends, etc.  for the entire year only once in December, (DEC 16)   And, they only generate one 1099 DIV form to the SS# of the person registered to the Mutual Fund on DEC 16.

1) Assuming that long / short term Capital gains and dividends are significant amount, (greater than $600) How do I prorate the entire amount for the year,  i.e. part if that was prior to death would go on mom's 1040 tax return and the part paid after death on the beneficiaries 1040 tax return ?

2) In previous posts related to this discussion, Nominee elections was mentioned (and explaining with nominee elections)

3) What is Nominee elections ?  which tax form can you use to specify Nominee elections ?

[Critter]

There would be no proration ... it is all yours since you owned the mutual fund when the dividends, int & cap gains are issued. 

[Anonymous]

sorry about your loss

there is no December 16th  rule for mutual fund distributions. a specific mutual fund or mutual fund family  can pay out on 12/16 and on no other  date for the year, but the 1099's will cover the full calendar year.  the owner on the date of the distribution is the one to report it on their tax return    

don't  know where you got your info from, but i can guarantee you many mutual funds pay out on multiple dates.   some even monthly.   as a matter of fact Mutual Funds can make distributions in the following year that are taxable in the current year 

if you mother's  SSN is on the 1099 but some or all of the distributions were after her death.  you'll need to report the 1099 amounts  on her final return.  for those after her death, TT can not handle negative amounts for things like dividends, interest or capital gains (negative proceeds) the only way TT can handle this is through using the nominee boxes. the recipient info is for your use only it does not appear on forms.   TT does a poor job of this in many cases.  Even if not required,    if might be a good idea to file a final return for her.   

you could then report the distributions pro rata on the beneficiaries return

technically this is supposed to be done but in practice I've never seen it.

Nominee/middleman returns. Generally, if you receive
a Form 1099 for amounts that actually belong to another
person, you are considered a nominee recipient. You
must file a Form 1099 with the IRS (the same type of Form
1099 you received) for each of the other owners showing
the amounts allocable to each. You also must furnish a
Form 1099 to each of the other owners. File the new Form
1099 with Form 1096 with the Internal Revenue Service
Center for your area. On each new Form 1099, list
yourself as the “payer” and the other owner as the
“recipient.” On Form 1096, list yourself as the “Filer.” A
spouse is not required to file a nominee return to show
amounts owned by the other spouse. The nominee, not

the original payer, is responsible for filing the subsequent
Forms 1099 to show the amount allocable to each owner

[Hal_Al]

The cost basis of property transferred at death receives a “step-up” in basis to its fair market value. This eliminates an heir's capital gains tax liability on appreciation in the property's value that occurred during the decedent's lifetime.  That is, if you sold the mutual funds, after inheriting the account, there is likely very little capital gain or loss.

Most, if not all, capital gains distributions from mutual funds (box 2a of the 1099-Div)  are paid in December, so those are all yours.  They are correct, they only send one 1099-Div for the entire year.  Dividends are usually paid monthly or (more likely) quarterly (but some are paid only  in December).  You'll have to use the mutual fund statement to allocate those.