SSA-1099 treatment as IRD - in Final 1040 and estate 1041

[KevinSea1]

My father passed away on 1/1/24.  His December benefit was deposited on 1/3/24.  Though social security was informed of his death they issued his SSA-1099 under his SSN.  The same thing happened with his pension, it was deposited on 1/2/24.  The pension provider refused to reissue the 1099-R. I could find no method to get Social Security to reissue the SSA-1099 under the EIN of the estate.

TurboTax and the IRS are pretty clear on how to deal IRD for 1099-INT and 1099-DIV (use the nominee approach).  But they are pretty much silent on the 1099-R and mute when it comes to SSA-1099.  

I was able to figure out what I believe is the correct solution for the 1099-R:  Enter the 1099-R into the 1040, use "other taxable income" entry in TT for the 1040 with a negative value and a note explaining its IRD using Nominee Dist to the EIN.  Then issue a Nominee 1099-R on paper or through a third party (Quick Employer Forms does not currently support that type).    Then I made an entry in the 1041 under "Other Income or Loss" (positive this time), again with a description.  This makes sense and leaves a nice paper trail.  My 1099-R is kind of unique as there is only one month involved, but this must be common when someone dies early in any month, so the last payment is IRD and the ones prior stay in the 1040.

As far as the SSA-1099 I have found nothing.   I could use the same approach as above but there is no way to send a nominee SSA-1099.  It is also unclear how much of the benefit should be transferred.   I was thinking of taking the safe approach of deducting all of it on the 1040 side and putting it all in on the 1041.  When I do this in my odd scenario, I get a negative AGI in the 1040 (TT does not complain).  There is also the question of how much of the benefit should be transferred to become "income" in the 1041?  The max amount for SS benefits (85%)? What it would have been for my dad if he had lived until 1/3/24 (0%), or something else? 

Any advice would be welcome.  It would also be nice for there to be a proper overview of this somewhere.  I have spent days on this searching...

Thanks!

[DianeW777]

Yes, you are taking the right steps for the 1099-R. You can nominee the pension and the social security from your father to the estate using the method provided below.

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 yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself 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
• Form 1099-INT
• Form 1099-DIV
• Form 1099-R
• As far as the SSA-1099 I would be advise holding on to it because with only this income, there is nothing to file anyway.