Neal

[neallove]

Annuity problem

Single taxpayer died and left estate to grandson who is 17

Insurance company paid off the annuity for 110,000 but wrote the check to the executor using the executors social security number. Fed and state tax taken out. 1099R issued to the executor.

The insurance will not issued corrected 1099.

Can executor issue a 1099R to the grandson? If so, how does this get handled on the executors return? The amounts have to show on executor 1040 because the IRS will pick it up.

I know that on interest income you can use the nominee and take it back off.

[Burke]

I am going to assume here that the annuity did not name a beneficiary. This probably happened because the executor put his SSN on the claim forms when he sent them in to the insurance company, instead of the Estate EIN. Putting it on the return is not the problem, you can show gross amt on 16a and "zero" for taxable on 16b. But that is the only way to get the taxes refunded. Hopefully, none of the withheld taxes will be lost when they are applied to the executor's income, because he is going to owe this money to the grandson. And the grandson is going to have to report the annuity as income on his own return if the money has been distributed to him. The executor can issue a 1099R to the grandson, but he is not going to be able to show tax withheld on it. Let's hope the exec gets it back before the grandson has to file. The executor could alternatively issue a check for the withheld taxes to the grandson if that is a problem. You don't say if the proceeds were put into the estate account, whether a fiscal year was requested on the estate or whether the funds were distributed. All these factors will determine what year the money will be reported in.