Nominee distribution

[sabkosl13]

Client is an executor for her father who died in May 2021. She must to do final and Estate income tax return.

She has 1099-DIVs with amounts in the box 1a, 1b, 3, 5, 7, 11, 12 with her father's SSN. Part of these amounts is before death, part after.

Does she have to file a 1099-DIV for the Estate? How? From several companies she has the info how much should be for final return and how much for Estate, but only for box 1a. What about other boxes? 

[jeffmcpa2010]

My opinion

1. She does NOT have to file a 1099-DIV for the estate. 

Usually clients get a complete statement from the Accounts, that has detail pages behind the summary 1099, She may be able to (hopefully) get those for you so you can figure out the apportionments.

Enter the entire amount on the individual's 1099 on the schedule B input, and double click on the payer name and you can open a schedule B worksheet - Line D Check nominee and the amount of dividends belonging to the estate, and that will get subtracted on the individual schedule B, I believe that only works for Ordinary Dividends. Everything else (Qualified, Capital Gains etc.) I don't think you can get it automatically and probably just have to enter the correct amount. (If the difference is significant I might attach a schedule)

Have you considered if the overall tax difference is significant between doing it correctly and just reporting the 1099's on the Individual return? If not significant, I might just blow it off and do it that way, The estate will be writing the check to pay any tax either way right?

Sometimes you can justify to yourself that if the tax gets paid who's going to ask any questions...Again depends on the significance. If were talking a few $100 of Dividends I might go the easy way, If its $50k of dividends my answer might be different.

Have Fun!

[sabkosl13]

Well, the problem is that I did it an only ordinary dividends are converted.

I thought about giving everything for the final, but the total dividends is about $45K.

[jeffmcpa2010]

Was the amount of the ordinary dividends belonging to the estate significant?

[sabkosl13]

$40K

[jeffmcpa2010]

I would do the best I could to allocate everything (including trying to get more detail from the brokerage accounts year end statements) then attach a schedule to the Individual Return explaining why amounts reported were less than the 1099's received.

Not sure what else to do.

Perhaps someone will chime in with an idea.

[sabkosl13]

With ordinary dividends no problem. 

What do you think, can I recalculate the remaining values proportionally and put them in 1099-DIV worksheet in 1041?

[rbynaker]

It's clunky but if you break everything out into a separate entry on the Sch B Div input I think you can get the nominee box to work.

Line 1: Broker - Qualified Dividends / $x Total Div  / $x Qual Div / $y Nominee adjustment
Line 2: Broker - Non-Qualified Dividends / $x Total Div / $0 Qual Div / $y Nominee adjustment
Line 3: Broker - CGD / $x CGD / $y Nominee adjustment
etc.

In my experience, AUR does a pretty good job of not sending notices when things don't match up exactly in the year of death.  I would also attach a statement saying Dividends of $y reported on Form 1099-DIV from Broker were paid after date of death and are reported on Form 1041 for Estate of XYZ, EIN xx-xxxxxxx.

[rbynaker]

Yeah, I would enter on the 1041 in the appropriate categories as if you have a 1099-DIV.

[jeffmcpa2010 · Accepted solution]

I  like this idea.

[sabkosl13]

Thank you both for help. I will use your advice.