Estate Tax Return

[quicksam]

Clients Father died in October of 2012. The client never filed for a EIN for the Estate, so the Railroad mailed a 1099Misc "Other Income" for Vacation pay paid to the beneficiaries. They labeled it "Estate of Taxpayer", but used the Deceased Taxpayers Social Security number. This money was distributed after the date of death.

If I file this amount with the final return of the Deceased Taxpayer, it causes a balance due of about $2,500. Should I file for an Estate Id Number and file a 1041 and put the income on the 1041, which would pass the income to the two beneficiaries. The beneficiaries have no other income so the balance due would almost be eliminated. If so, how do I keep from getting the IRS letter because we did not claim the 1099misc(Other Income).

[taxea]

If it was distributed directly to the beneficiaries have the issuer correct the 1099's to each beneficiary with the amount each got.

[Burke]

Clients Father died in October of 2012. The client never filed for a EIN for the Estate, so the Railroad mailed a 1099Misc "Other Income" for Vacation pay paid to the beneficiaries. They labeled it "Estate of Taxpayer", but used the Deceased Taxpayers Social Security number. This money was distributed after the date of death.

It is unclear from your post if the RRRB paid the bene's directly, or paid the estate and the estate distributed the money. It does not go on the deceased's tax return. They should have made out the check either to the estate and/or the beneficiaries. I am guessing it was made payable to the estate and the estate distributed it? If there was no EIN for the estate or bank account, how was this done? Normally, a form 1041 is filed, it goes on Line 8, other income, and passes thru to the bene's on the K-1's. If it was paid directly to the bene's, taxea is correct, and they need to correct the 1099R to show that. Good luck on that. But it is a simple matter to get an EIN online in minutes for the estate and do a 1041 to take care of this. The payor used the deceased's SSN because that is all they had, and the executor did not get an EIN in the first place.

[mastertaxguy]

Rrb benefits-fiduciary tax return.

1. This might be IRD.
2 See TTB p 21-8, right column, halfway down.
3. Doubtful you will get RRB to issue a "corrected" 1099-RRB, so if this was on my desk, I would advise client to get an EIN for decedent's estate and show show the income on a 1041 for 2012 as nominee listing those who receive the income (listing their name(s), address(es) and ss#. AT least that is what I think I would do. No K-1's as that would complicate things.
4. Be sure to charge what this is really worth.
5. Determine if there are any other estate assets or IRD/other income paid after death.

[quicksam]

It is unclear from your post if the RRRB paid the bene's directly, or paid the estate and the estate distributed the money. It does not go on the deceased's tax return. They should have made out the check either to the estate and/or the beneficiaries. I am guessing it was made payable to the estate and the estate distributed it? If there was no EIN for the estate or bank account, how was this done? Normally, a form 1041 is filed, it goes on Line 8, other income, and passes thru to the bene's on the K-1's. If it was paid directly to the bene's, taxea is correct, and they need to correct the 1099R to show that. Good luck on that. But it is a simple matter to get an EIN online in minutes for the estate and do a 1041 to take care of this. The payor used the deceased's SSN because that is all they had, and the executor did not get an EIN in the first place.

Burke,

The 1099Misc was issued to the Estate of "Deceased Taxpayer", but using the taxpayers social security number. The Railroad wrote the checks to the estate. I don't know how she got them cashed. I think I will file for EIN and do a 1041, but how do I keep the Deceased Taxpayers personal return from not matching since there is a 1099misc in that social. It is list as "Other Income" on the 1099misc.

Thanks

[taxea]

Burke,

The 1099Misc was issued to the Estate of "Deceased Taxpayer", but using the taxpayers social security number. The Railroad wrote the checks to the estate. I don't know how she got them cashed. I think I will file for EIN and do a 1041, but how do I keep the Deceased Taxpayers personal return from not matching since there is a 1099misc in that social. It is list as "Other Income" on the 1099misc.

Thanks

Does she have a filed F56 and a durable POA?

[Burke]

Burke,

The 1099Misc was issued to the Estate of "Deceased Taxpayer", but using the taxpayers social security number. The Railroad wrote the checks to the estate. I don't know how she got them cashed. I think I will file for EIN and do a 1041, but how do I keep the Deceased Taxpayers personal return from not matching since there is a 1099misc in that social. It is list as "Other Income" on the 1099misc.
Thanks

You can show it on the deceased's 1040 worksheet for Line 21 if you want and then back it out as nominee income to the estate. That should take care of it. On the 1041, do the K-1's. Trying to do it any other way will complicate things.