How do I report interest income for a deceased person on my tax return?

[sandy4042]

I received a 1099-INT with my late mother's ssn on it.  I had my name on her account so that I could handle it for her.  The account was dissolved in Jan 2022 but some interest for 2022 accrued under her SSN (her last 2021 tax return reported most of the interest).  I would like to report the interest (about $100) on my Schedule B.  Do I need to get the bank to issue a corrected 1099-INT with my SSN on it?  Or does the IRS and Turbotax allow me to enter interest assigned to another's SSN?

[tagteam · Accepted solution]

If you mother passed away in 2021 and you filed her final return, you can report the interest in your return if you, in fact, received the interest.

See https://www.irs.gov/publications/p559#en_US_2022_publink100099582

[PattiF]

Since this was interest earned after the date of passing, and since you are listed jointly on the account, you would claim the interest. 

You can enter the 1099-INT as if it were your own. 

[sandy4042]

@PattiF @tagteam  Do I enter my mother's SSN anywhere on the Schedule B through Turbotax to allow the IRS to link this interest to the bank's 1099-INT?  I am concerned about the automatic checking that the IRS programs do to sync tax returns with bank reporting of interest, don't want any red flags or coming after my deceased mother for not reporting the interest.

[MaryK4]

No you do not have to enter her information, just keep a copy of the 1099-INT with your tax records.  @sandy4042 

[sandy4042]

@MaryK4 I also have an account at the same bank.  Would one just add the interest from my mother's account to it, and do one line entry.  Or should I try to do two separate entries (don't know if TT allows that though).  I would like to make it a separate entry, just for my own records. The proceeds from the account were split up among my siblings.  Another possibility....could I list it under "Other income"?

[tagteam]

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@sandy4042 wrote:

....could I list it under "Other income"?

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This is only one opinion, but that is exactly how I would handle it.

You could notate (in the description) that it is "Income in respect of a decedent" and your mother's social security number (or "IRD interest - XXX-XX-XXXX").

[sandy4042]

@tagteam Thanks, I may just do that!  I vaguely remember my mother doing something on her paper Schedule B when my father passed away.  He had some individual accounts under his own ssn and she wrote a note on the Schedule B for their interest, something involving the term "nominee".  Googing nominee now, does not seem to apply to my situation.

[LindaS5247]

You could ask your financial institution to reissue you a Form 1099INT with your SSN on it since you are also on the account.

 I would not add it to your 1099-INT because then it will not match the information that is reported to the IRS.

Reporting it as described above as "Other Income" would also be appropriate. It is not a large amount and you are also already on the account. 

 Label it as interest income from your deceased mother, her SSN and state that you are on the account as well.  

Click  here for detailed information on taxes when there is a death in the family.

[sandy4042]

@LindaS5247 @tagteam I read the IRS description of what should go under "Other Income" and it explicitly says not dividends or interests.  So I'd be breaking that rule, but that line at least allows for the taxpayer to input an explanation.  But for $100 probably not enough to be audited for.  I will call the bank tomorrow and see if I can get a corrected 1099-INT, if not, I'll do one of the other alternatives (Schedule B or Other Income).

Thanks for your help.

[JulieS]

Yes, you are correct that $100 is not likely to trigger an audit. 

Both approaches above are valid, but since it is interest and your name is on the account, it makes sense to just report the amount as if you received a 1099-INT with your name on it. 

If you do decide to enter it as "Other income", be sure to label it as Income in Respect of a Decedent (IRD) and not as interest income. 

[tagteam]

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@sandy4042 wrote:

So I'd be breaking that rule, but that line at least allows for the taxpayer to input an explanation.  

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I have done precisely what I outlined previously and have had no issues. The income may technically be interest but is it also IRD and you received a tax reporting form with another's name and social security number.