Author Topic: tax reporting for deceased two years ago  (Read 1679 times)

rayt168

  • 5 O'Clock Shadow
  • *
  • Posts: 60
  • Location: Florida
tax reporting for deceased two years ago
« on: February 23, 2017, 04:38:17 AM »
Hello, I was wondering if anyone has had experience with the following situation.

My parents had a joint brokerage account with my dad listed as the primary account holder.  The account was a joint tenant with right of survivorship.  My dad passed away in 2015.   For tax year 2015, I helped my mom filed her last final tax return with my dad.  The account was still open at the end of 2015.  In 2016, my mom filled out the paperwork to transfer the assets in  the joint account to an account under her name only.  My mom received a 2016 1099 for the joint account with my dad's SSN for the dividends and capital gains. 

My question is (1) does my Mom file the income under her return (even though her SSN isn't listed on the 1099), or (2) is there some other forms that need to be used for this particular situation?  Thanks in advance.

oldmannickels

  • Stubble
  • **
  • Posts: 249
Re: tax reporting for deceased two years ago
« Reply #1 on: February 23, 2017, 06:53:53 AM »
I would file and attach an explanation exactly as your laid out above. If the IRS rejects your explanation you would have to take additional actions, but I don't think they will do that.

MustacheAndaHalf

  • Walrus Stache
  • *******
  • Posts: 6629
Re: tax reporting for deceased two years ago
« Reply #2 on: February 24, 2017, 10:19:10 AM »
Your mom does file it on her return, but as a "nominee".  She received the money, but the 1099 forms listed someone else.  If she's filling out IRS forms herself, she will probably need to find a place for "nominee interest" or "dividends as a nominee".  And she'll list the social security number of the person who received the interest / dividends.

If using tax software, look for "nominee" handling.  Typically I see this when the tax software is trying to input a 1099 form, and there's an additional field referring to receiving money as a nominee.

rayt168

  • 5 O'Clock Shadow
  • *
  • Posts: 60
  • Location: Florida
Re: tax reporting for deceased two years ago
« Reply #3 on: February 25, 2017, 11:16:32 AM »
Your mom does file it on her return, but as a "nominee".  She received the money, but the 1099 forms listed someone else.  If she's filling out IRS forms herself, she will probably need to find a place for "nominee interest" or "dividends as a nominee".  And she'll list the social security number of the person who received the interest / dividends.

If using tax software, look for "nominee" handling.  Typically I see this when the tax software is trying to input a 1099 form, and there's an additional field referring to receiving money as a nominee.

Thanks, MustacheAndaHalf.  I am trying your suggestion out in TurboTax Premier.  I entered my parents' 1099 DIV and one of the questions was "Do I need to adjust these dividends?".  I checked off the box and entered the amount.  Afterwards, I looked at the tax due and the amounts were identical (before & after making the adjustment).  I assume this approach would work if the primary accountholder was NOT my dad.   The dividends weren't taxed at all but it should since my mom is the joint account holder.  Maybe I should just check off the "Do I need to adjust these dividends" to inform the IRS that my mom was a nominee and leave the adjustment amount blank.  Your thoughts? 

Thank you.
 

latinlover77

  • 5 O'Clock Shadow
  • *
  • Posts: 20
Re: tax reporting for deceased two years ago
« Reply #4 on: February 26, 2017, 03:59:50 PM »
Wouldnt you need to contact the brokerage firm and have them issue a new 1099 under your mom's SSN? It makes sense to me  that the brokerage account assets have been completely transferred to your mom as the survivor, and she should be reporting the taxable activity of 2016 under her SSN. I think a quick call to the brokerage might resolve this issue going forward.

 

Wow, a phone plan for fifteen bucks!