1099-INT Deceased taxpayer

[xracer]

My client had their last living parent pass away in 2008. My client did not have a final return filed in 2009 because the amount of income was below the filing requirement. There was a CD that was owned by the parent but my client was also shown on the account. The CD was not transferred into my client's name. The CD matured in 2009 and was paid out. The 1099-INT was issued to the deceased parent but my client was the recipient of the funds. I have included the amount of the interest on my client's return. I told him to contact the bank and have them reissue a 1099-INT in his name and SSN and file a corrected 1099 for the deceased. I am receiving some resistance from my client to have the 1099 corrected. Am I off base?

[JG EA]

Depending on the amount, your client should report the income on his return since he owns the money now. If it is $600 then the IRS may look for it, but it can be explained where it was reported.

[ChEAr$]

Depending on the amount, your client should report the income on his return since he owns the money now. If it is $600 then the IRS may look for it, but it can be explained where it was reported.

Instead of $ 600, did you really mean $10, the interest 1099 threshhold?

But to the OP, don't worry the client or the bank about correcting it. Just so the interest is reported correctly
is what matters. Depending on the size of the interest, the IRS may or may not raise an issue down the road.
In this day and age as to filing threshholds, I would doubt it, however.

[JG EA]

Instead of $ 600, did you really mean $10, the interest 1099 threshhold?

No but I should have. I was thinking of looking for a 1041, You are right they look for any interest also.

[taxea]

The CD was matured and was paid to the client who owned it after the death of the parent. The account was never transferred into the client's name so the 1099 was issued to the parent.
Is there any chance that the interest should be allocated to the parent for 08 earnings up to date of death and the remainder to your client?

[Burke]

Since it was a CD and interest was paid at maturity, no. It goes on the client's return. Just don't worry about correcting the 1099. It isn't worth the trouble.