Received 1099-R for Deceased Parent

[hybridtaxguy]

My mother passed away in December of 2020.  I received a 1099R in 2022 for 1 month of disability income that she received in January of 2021.

The 1099R is in her name with a code of 3 for disability.  The money from January 2021 was deposited into a checking account in which my brother and I as well as my mother were on.   

What do I do in this case?  Her taxes for 2020 have already been filed, not sure how to claim this income?  This is the only income that was received in 2021.  

Any\all help is appreciated, happy to answer any questions.

Thank you so much for your time!!!

[tagteam]

You and your brother can report the income on your individual income tax returns as income in respect of a decedent (IRD).

See https://www.irs.gov/publications/p559#en_US_2020_publink100099582

[hybridtaxguy]

So my brother and I should create a 1099-MISC, we each report half of the income and half of the withholdings?

Does it matter that the 1099-R in her name is marked as disability income and not beneficiary income, and not in our names?

Appreciate the follow up here, just want to ensure we do this correctly to avoid any issues.

Thank you!

[tagteam]

You do not need to create any tax reporting statement for this income (e.g., a 1099-MISC). Those statements are for business reporting only.

If there are any inquiries about the reporting, a response that the income is IRD and reported on your returns should suffice. It actually is beneficiary income, at least technically, since you and your brother acquired it as a result of the passing of your mother (I assume you are her rightful heirs).

[hybridtaxguy]

I appreciate your help!  I'm not quite clear on where I report the income?  I just add it to the gross income in  w2?  Sorry I'm not clear on how to report it.  

[hybridtaxguy]

If you have to include income in respect of a decedent in your gross income and an estate tax return (Form 706) was filed for the decedent, you may be able to claim a deduction for the estate tax paid on that income. See Estate Tax Deduction, later. 

We'll each create a 706?

[tagteam]

As "Other income" (in TurboTax there should be a screen to enter miscellaneous income).

Do not add it to your W-2.

[tagteam]

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@hybridtaxguy wrote:

We'll each create a 706?

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No. Form 706 is an estate tax return. You do not need to file any form beyond your 1040.

[hybridtaxguy]

Thanks for the clarity, and to be sure, we don't need to get an updated 1099-R for my mom from the payee\vendor?  We can claim the income as it is, when we report the misc income we give an explanation of where it's from, etc?

[tagteam]

Yes. Report as miscellaneous income with a description of "IRD".

[hybridtaxguy]

Hi,

I am now filing my taxes and I have done the 'other taxable income' and put in the gross distribution from my deceased mothers' 1099-R.  However, turbo tax doesn't seem to allow me to enter in the federal income tax withheld causing me to overpay in taxes, how am I supposed to determine the income I should owe?

the 1099-R shows:

box 1 of 2767.70

box 2a of 2767.70

box 4 of 233.10      (federal income tax withheld)

box 7 distribution code of 3

If taxes have already been withheld, I would assume I should be able show those taxes have already been paid?

The money went into a checking account that was then split by my brother and I, would we each just claim 1\2 of the money deposited into the checking account?  (2767.7-233.1) = 2534.6 / 2, meaning we each claim an additional 1267.3 in income?

[hybridtaxguy]

Any guidance here @tagteam?

[tagteam]

Personally, I would simply enter my share of the withholding amount in the Estimates and Other Taxes Paid section of the program.

In Other Income Taxes, there is a line for Withholding not already entered on a W-2 or 1099.

[hybridtaxguy]

I do not see Other income taxes, did you mean 'Other Tax Situations'? Not seeing 'Withholdings not already entered on a W-2 or 1099' anywhere  Also, it's disability income which is not taxable in IL, yet if I claim this income it's considered just income, which means ill be paying tax?  Do I just make a good faith effort here in paying the tax I should be paying?

[tagteam]

I am not sure which version of TurboTax you are using.

Click the Deductions & Credits tab and look for the section where you would enter estimated taxes paid.