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    Interest after death

    Client passed away 11-03-2008. She left a will naming me and two others executor.

    After getting the letter of testamentary and EIN for estate, we went of one bank to give them the EIN so her interest would be reported in 2009 with the EIN instead of SS number.
    We did not know we would have to redeem CD's at that time. We wanted to keep them as they were, because of higher interest rate, until the estate was ready to be distributed.

    Well the attorney had a KA-NIP-TION. He said he told us to leave CD's as they were and wants us to come to his office next week to discuss this.

    She has CD's in several other banks that we have not notified. If the banks report the interest for 2009 with her SSN how will this affect her 1041? The interest will be 25000.00 to 30000.00.

    I may do her final return but not the estate return. The lawyer said it would be a conflict of interest since I am named in the will. I don't want to do it anyhow since I don't have that much experience with estates.

    Thanks in advance for any advice. I couldn't make it through tax season without your message board and Tax Bookl.

    Lucy

    #2
    Nominee distribution

    Just 1099 the interest from date of death onwards via a 1099 INT from the deceased to the Estate.

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      #3
      By the way, it happens all the time that interest etc. reporting after death of a person in not recorded correctly to the right taxpayers/entities.

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