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Bethune
New Member

Reporting nominee adjustment for decedent dividends

My mother died in 2024, and her brokerage firm reported some dividends that will need to go onto a Form 1041 and beneficiary K-1s.  I imported her brokerage statements.  From reading the IRS instructions the full amount of dividends should be reported on her schedule B, with an adjustment to back out amounts which will be reported on Form 1041.  I have successfully entered the amount to back off these dividends as a "nominee distribution adjustment."   I entered the correct amount of the adjustment in the easy step input screen, but the software is carrying a different amount to schedule B and page 1 of form 1040-SR.  Why is the software changing this amount and how can I fix it?

 

Also, it seems to be automatically computing the amount of qualified dividends that should be backed out of her return.  The computed amount is incorrect and I don't see a way to override it on page 1 of form 1040-SR.  Any suggestions on how to report the correct amount of qualified.

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1 Reply
DianeW777
Expert Alumni

Reporting nominee adjustment for decedent dividends

Yes. You can and the nominee actions could provide a better avenue if you see the wrong amounts. Enter only the amounts that belong on the estate by editing the actual amounts, and on your mother's final return. Next, view the forms to see your changes.

 

Then use the information below to actually nominee the amounts so that the IRS has the data.

 

Nominee Returns.  This is how the IRS knows what you are doing.

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 your mother as the payer and the other owner, as the recipient. On Form 1096, list your mother 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 to complete and print the forms here: Use only the ones you need.

We are sorry for your loss.

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