Interest Income

[liandri17]

I filed a final tax return for my mother (who passed away in 2020) w/the IRS in 2021 to get her final refund. The refund included $13.51 in interest added to the refund because of the delay. As both the executor and sole beneficiary of her estate would I need to report this interest amount on my 2021 tax return when I file? This was the only income the estate earned in 2021 so there's no 1041 filing requirement.

[MaryK4]

Yes, you can report the amount on your tax return since you were the beneficiary.  You must report any interest income earned even if you don't receive a form. 

Sorry for your loss.

[liandri17]

OK, TY for your kind words. How would this income be entered on TTax? As 'Miscellaneous' interest income?

[jnncrane]

No. It would go on the estate return if the total income for the estate is $600 or more.

Because the income is under that amount then it isn't taxable to anyone.

[ThomasM125 · Accepted solution]

Since you received the income, it is taxable to you, although the tax will be minimal since the amount is so small.

You should report it as interest income in the Interest and Dividends section of TurboTax (in the Income and Expenses area on your federal return) and then Interest on 1099-INT. You don't need a form 1099-INT reporting the interest income, as you will just be asked for the name of the entity it came from and the amount.

@liandri17

[jnncrane]

Who’s social security number is on the 1099 form? It should be the mother’s. If so, it is estate income. Under $600, no estate return is due.   

[jnncrane]

Check out publication 559. The answer is there on page 15. 

[liandri17]

What name would I input? Would I use "<mothers name> estate" or "IRS"? I have an EIN for my mother's estate, would I input that as well? Also, as the executor would I need to file a K1 to myself for that income? Or a 1099-INT to myself?

[DMarkM1 · Accepted solution]

The income belongs to the estate.  Since total estate income is below the standard deduction ($600) on the estate form 1041, the income is not taxable nor reportable.  You do not need to report it on any tax return.  

[jnncrane]

You don't put it in on any return because it is under $600 to your mother. It shouldn't have your social security number on it. It would be taxable to the estate if it were more than $600. 

It isn't taxable or reportable to anyone. Do not put it on your return.