What are the steps I need to take to file a form 1096 and 1099-INT to the nominee designate?

[keefersmith]

I am submitting a 1040 for my mother who passed away during 2023 so I am the nominee designate for her 1099-int for part of the interest earned during 2023.  I am currently using TurboTax Deluxe.

[RobertB4444]

If your mother was alive for part of 2023 then she should have a tax return filed for her if she meets the filing requirements.  Any 1099s issued with her social security number should be included on that return.  In future years you should include those on your return.

@keefersmith 

[keefersmith]

Per the IRS the interest paid on the account after her passing is not applicable to her tax return and has to be applied to a nominee designate (i.e. beneficiary) who is to be issued a 1099-int for the interest paid on the account after her passing for the remainder of 2023.  I am try to understand how to submit a 1099-int to the irs for the nominee designate (i.e. me) to include that interest on my 2023 taxes.  I am using turbotax deluxe but this doesn't appear to be supported.  do I need to upgrade to a different turbotax version such as home & business?

[RobertB4444]

You have a couple of options.  

You can issue yourself a 1099-int from your mother for the amount of interest paid to you in order to report the transfer to the IRS.  That's very involved but it definitely does dot all the i's and cross all the t's.

Or, you can manually enter the 1099 into TurboTax and, in the blank for the bank name, enter "XXXXX Bank, Nominee interest for SSN xxx-xx-xxxx".  Then that is the name that will show up on the schedule B.

@keefersmith 

[keefersmith]

Ok, thank you!  If it is acceptable to the IRS to just manually enter the information in the blank for the bank name on a 1099-INT in my 1040 (as you specified) then I will do that.  Everything I have read indicated that I had to submit a 1099-INT to the IRS for the nominee interest to accomplish this.  As you stated, that gets very involved.

Thanks so much for your help.

[DianeW777]

Yes, the IRS will accept the interest reported on your tax return and @RobertB4444 gave you the appropriate steps to show the necessary information to the IRS.

Keep a copy of the 1099-INT so that if you need to answer any questions in the future you can easily show the income was reported.

I am sending my sympathies to you and your family. 

@keefersmith