| Author |
Message |
waphylz@aol.com
Guest
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 Posted:
Mon Oct 17, 2005 5:59 am Post subject:
Income with Respect to Decedent |
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My father died about 2 months ago. I am the only heir and
executor of his estate. It is not large enough to require
payment of estate taxes.
I will be doing his final tax return, which can include all
income and expenses up to his date of death. However, some
of his income-generating accounts (stock account, bank
accounts, etc.) generated interest and/or dividends after
his death and before they were changed over to my name. I
understand this is "Income with Respect to Decedent". Since
I ultimately ended up with this income, I will need to
declare it on my tax return.
My problem is that the Form 1099's I receive for him at the
end of the year will not be divided correctly between his
income before his death and the income generated after his
death but before the transfer of the property. How do I
show the IRS that some income on his 1099's was really
received in the interim period and are being accounted for
on my return? Do I file 1099's showing him paying me
interest/dividends in the correct amounts?
I have been reading a lot of the IRS booklets on the subject
of estates and also got the Nolo Executor's Guide, but I
can't find the answer to this. It seems like it would be a
fairly common occurrence, so I'm puzzled why I'm not able to
find an answer. Thanks in advance for any help you can
provide.
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
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Arthur Kamlet
Guest
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| Posted:
Tue Oct 18, 2005 1:34 pm Post subject:
Re: Income with Respect to Decedent |
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waphylz@aol.com <waphylz@aol.com> wrote:
| Quote: | My father died about 2 months ago. I am the only heir and
executor of his estate. It is not large enough to require
payment of estate taxes.
I will be doing his final tax return, which can include all
income and expenses up to his date of death. However, some
of his income-generating accounts (stock account, bank
accounts, etc.) generated interest and/or dividends after
his death and before they were changed over to my name. I
understand this is "Income with Respect to Decedent". Since
I ultimately ended up with this income, I will need to
declare it on my tax return.
My problem is that the Form 1099's I receive for him at the
end of the year will not be divided correctly between his
income before his death and the income generated after his
death but before the transfer of the property. How do I
show the IRS that some income on his 1099's was really
received in the interim period and are being accounted for
on my return? Do I file 1099's showing him paying me
interest/dividends in the correct amounts?
I have been reading a lot of the IRS booklets on the subject
of estates and also got the Nolo Executor's Guide, but I
can't find the answer to this. It seems like it would be a
fairly common occurrence, so I'm puzzled why I'm not able to
find an answer. Thanks in advance for any help you can
provide.
|
Handle this like Nominee Distributions are handled. The
description of Nominee Distributions can be found in IRS
Publication 550.
Brief Summary: List all 1099-INT income on deceased's final
tax return, and get a subtotal on Schedule B.
The write: Nominee Distribution as IRD to TaxPayer ID
[Your SSN]"
and enter the total 1099-INT IRD amount.
Subtract IRD from the Subotal, and the balance
goes to Form 1040 Line 8A.
Do the same for 1099-DIV gross dividend and
also for qualified dividends.
On your own tax return, report on Schedule B
IRD from TaxpayerID [deceased's SSN] $XXX
for both Interest and for Dividends.
__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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DORFMONT@aol.com (Linda D
Guest
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| Posted:
Tue Oct 18, 2005 1:53 pm Post subject:
Re: Income with Respect to Decedent |
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Since I usually end up doing the decedent's final return,
and the 1041 for the estate or trust, and the heirs'
returns, I use a splitter diagram to show where the income
came from, who it was reported to, and who will be showing
it on their tax return. I am sending you a copy by email. As
long as IRS can find the income it will leave you alone.
Report all the income under your father's number on his
final return and show on that return nominee income
(negative amount) to you, with your number. On your return
show the income coming from your father's number as source.
Attach the splitter to both returns. IRS has a tendency to
require unnecessary 1041s. Don't be surprised if they ask
you to file one for his estate.
Father's return:
Bank of America $1525
Nominee interest to 999-99-9999 (25)
Your return:
Nominee interest from 888-88-8888 $ 25
Linda Dorfmont E.A., CFP, CSA
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >>
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