Estate Return

[TP82]

One of my clients is working with his siblings on his deceased mother's estate.  The house and estate won't be settled until 2020 and there are 4 siblings involved.  They cashed in US Savings Bonds and received several thousand dollars in interest for 2019.  The 1099-INT was issued in the estate's TIN.  I figured the attorney would report and pay taxes when they did the final 1041 but they gave the 1099-INT and told them they would need to take it to their tax preparer and report it in 2019.  I am not that familiar with 1041's so here are my questions.  Can I just do the 1041 and let the "estate" pay the taxes instead of giving each sibling a K-1?  Do I have to do K-1's and list each sibling?  If the estate "pays" the balance due, then will it be deducted in 2020 on the final 1041?

[Anonymous · Accepted solution]

If the estate cashed the bonds (meaning it was done after her date of death) then the estate would pick up the income. Remember-  you can do a fiscal year return for an estate. 

If the bonds were cashed before DOD, then they should go on her final 1040.

[TP82]

The bonds were cashed after her DOD.  She passed away in Sept 2018 so it is taking a while to settle but it looks like it will be very soon this year.  Not sure if a single return will do it.  Can I skip the K-1's?

[BobKamman]

Even if the bonds were cashed after DOD, the interest could go on the decedent's final return, which might be the least messy way of handling it.