Level 6

Question

Deceased client receives 1099INT a year after death.

Forum|Forum|2 years ago
March 21, 2024
4 replies
32 views

Have a client who's mother died in early 2022 and this February received a 1099 dated for 2023 interest earned under 2500. I know it's under the standard deduction but it is unearned income. Do we just ignore it or file the taxes?

Edited: I now have another one who received a 1099R in his name for 2023 and also passed early in 2022.

ProSeries Professional

This topic has been closed for replies.

Skylane

Intuit Community Champion

Is a 1041 being filed for the estate? Include the income with the estate return.

If no 1041 being filed I’d suggest whoever inherited the income include it on their 1040.you can explain in preparer notes or show it as nominee….. If there is ever a question you’d be able to demonstrate the tax has been paid.

If at first you don’t succeed…..find a workaround

F

Frustrated-in-IL

Level 8

If it is a joint return, I would give the 1099INT to the joint owner to include on their return and tell them to fix it so it doesn't come again under a deceased SSN. If there is no joint owner, then it should go on Form 1041.

I think the 1099R is a little more complicated. If it is from a pension in which the payor was never notified, then once you notify them and return the money they will issue a corrected 1099R. This is not a claim of right situation.

If it is an IRA RMD, then it should go on a 1041. If it is from interest earned on excess insurance dividends, then it should go on Form 1041 and you have now found another policy from which your bill can be paid, including the client grief and aggravation charge you should tack on.

sjrcpa

Level 15

FYI this usually happens because the responsible party doesn't notify the payor of the death.

The more I know the more I don’t know.

BobKamman

Level 15

Have I written yet this year, "We have a tax on income, not on pieces of paper" ?

Someone alive (or some fictitious entity like an estate or trust) got that money. It is income. Put it on their return. Regardless of whether it is shown on a piece of paper, or what kind.

shf1957Author

Level 6

I entered the amounts on the parties return that benefitted from the income. I figured that is the only moral and right thing to do since they received the funds. THANK YOU EVERYONE..

T

Tara

Level 3

And let the beneficiary know they need to update the account titling. That should have been done at the time of death. That account shouldn't be titled to a dead person. This is sometimes easier said that done.

M

MICHAELMARS

Level 6

My uncle, who taught me how to be snarky dealt with a similar issue 2x. Some $17 was reported to the IRS and they were asking for a tax return from the recipient. 1-he wrote the irs that it was a dead issue and in the other he gave the irs the taxpayers last know address - the cemetery.

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