1099 split for deceased recipient

[alp18]

Father passed in June.  Received 1099 with includes DIV recevied after death - thus part of estate.   Tax return is supposed to show full 1099 and then an adjustment for the amount attributed to estate.   Question is,  TT seems to only ask for the adjustment once even though there are multiple lines on the 1099.   How should qualified or CG be entered on his return?  Full amount, or the adjusted amount?

[Irene2805 · Accepted solution]

I'm sorry for your loss.

To indicate that a portion of the dividends are attributable to someone else (the estate), you can enter a nominee adjustment.  To do this please follow these steps:

1. On the Wages & Income screen, in the Interest and Dividends section, click the Start/Update box next to Dividends on 1099-DIV.
2. Select that you will type in the information yourself and click Continue.
3. On the next screen, enter the details from the 1099-DIV and click  Continue.
4. On the next screen, Tell us if any of these uncommon situations apply to you, mark the box I need to adjust these dividends and click Continue.  [Screenshot #1, below.]
5. On the screen, Tell us about your dividend adjustment, enter the adjustment amount (the amount attributable to the estate) as a positive number.  [Screenshot #2]

Screenshot #1

Screenshot #2

[alp18]

thank you.

I did get this far although I was indicating other instead of nominee.  But  what about the other items on the 1099DIV - like fx tx paid and CGD.   do they get split?

[ToddL99]

Yes, '"split" (allocate) the capital gains distributions and foreign taxes paid in the same manner as you allocated the dividend income.

[alp18]

Thank you.  I have figured out the fx tx pd, but  am not seeing where to input the split for CGD.

[alp18]

Turbo tax  is splitting the CGD with some logic I cannot figure out.    How do I override for the correct amount.  Also, it is not reflecting the adjustment I put in, but another amount.  Something else must be coming into the calculation.  How do I override for the correct amount

[Birdermom]

I have the exact same question. Wondering where Turbotax is coming up with the figure for the adjusted qualified dividends on the 1040 when I entered a completely different number as the adjusted qualified dividends on the dividend worksheet. I can't find a way to override and enter the correctly calculated number.

Also, I see that an explanation statement for the nominee capital gains distribution has been generated. But I believe it's necessary to send an explanation of the nominee adjustments for the whole 1099 DIV.  If I am correct, how do I do that?

[DianeW777]

My advice would be to actually do a nominee distribution and then enter your 1099-DIV with the correct numbers in each box for both the deceased (or estate) and yourself.  Due to the different types of distributions on a Form 1099-DIV the following can be an easier process for both returns.

Nominee Actions/Returns:

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received).  You must also furnish a Form 1099 to each of the other owners. 

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

• On each new Form 1099, list yourself or the original Payee as the payer and the other owner, as the recipient. On Form 1096, list yourself or the original Payee as the nominee filer, not the original payer.  The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here: 

• Form 1096-Transmittal 
• Form 1099-DIV 2020

Split the amount as needed and enter only the necessary portions on the appropriate returns.

[shamrock66]

To clarify for me what I think you are saying:

1. take the 1099 Received and split it between myself and the deceased. 

2. In TT I input I input my numbers on a 1099-div for me

3. in TT I input numbers that I am the nominee for (the deceased) into a separate 1099-div and then indicate that the total amount as an adjustment.

4. I send the the recipient of the income (copy to IRS with 1096 transmittal)

In that way all the fields will have the proper  split.

Likewise I would create 2 1099-B's and indicate a total nominee adjustment for the deceased portion as well, sending out another 1099B to the IRS and estate

[JamesG1]

For all 1099 forms, you would report the full amount of the IRS form on your tax return and then generate a nominee distribution as a negative entry.  That way the IRS will see that the full amount of the income has been recognized on your tax return.

As an example, for dividend income:

• Go to Federal / Wages & Income / Investments and Savings / Dividends on 1099-DIV.
• If the IRS Form 1099-DIV is for $100, report $100 in box 1a.  Continue.
• At the screen Tell us if any of these uncommon situations apply to you, click on I need to adjust these dividends.
• Click on I need to adjust these dividends.  Continue.
• Enter $50 as the adjustment amount.
• Click on I received all or part of these dividends for someone else (I am a nominee).  Continue.

View Schedule B Interest and Ordinary Dividends entries at Tax Tools / Print Center / Print, save or preview this year's return.

Part II will record the Nominee distribution amount.

You will generate the 1096 and 1099-DIV for the $50 for which you are a nominee.

@shamrock66

[shamrock66]

My problem with that approach is that although that would tell them the entire amount "nomineed" out, it would not properly report all the detailed split for Qualified Dividends, foreign tax, etc.

Likewise for security trades the proper splits for ST,LT.    I want to also avoid having to go through hundreds of trades to mark the appropriate ones with an "N" code.

I thought that by putting in 2 1099-Div's and 2 1099-B's, the IRS would see the whole amount reported. I would also include a statement explaining what I did and a printout of the items separated by Date of Death.

[ErnieS0]

The IRS allows you to report your stock sales as summary totals and send a brokerage statement, spreadsheet, etcetera, showing how the totals were calculated.

You can use that approach and include a printout of the items separated by date of death. In TurboTax choose the option to enter Sales section totals instead of One by One.