Decedent had loaned money to two of the heirs. These two heirs had not made interest or principle payments for years. The one heir will not owe money to the estate due to a lesser amount being owed. The accrued interest will be deducted from the amount of proceeds distributed to him from the estate. The other heir will need to pay a substantial amount to he estate for the estate to have adequate funds for distribution to the other heirs as per the will.
Does any of this need to be reported as interest income on the 1041? Interest did continue to accrue on the borrowed money for approx 10 months after taxpayers decease.
Does any of this need to be reported as interest income on the 1041? Interest did continue to accrue on the borrowed money for approx 10 months after taxpayers decease.
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