Estate closed 10 years. NYS distribures escheated assets

So a client of mine receives a 1099B and 1099C for significant money. As does his 2 brothers.

Apparently a brokerage account held by their father was missed when he passed in 2003. The estate was closed well before 2008. An attorney did a 706, I did all the 1041's. In 2018 NYS notified them of this money and distributed the money out.

Now the 1099's are in the ID number of the estate BUT are in the exact amounts paid to each beneficiary. So the $50,000 distribution produced 3 1099B's and 3 1099 misc "other income" instead of 2 1099's. All 1099's are ID's to the closed Estate.

Would you file a 1041 even though it was closed 10 years ago or let each beneficiary file on their own return of course risking an IRS inquiry or should I simply file a 1041? I am leaning on filing a 1041. Crazy but I purged all my files from that far back on this account so I have no copies of anything form the estate in 2008.

What say the wizards on Taxprotalk?

Thank you for any thoughts!

I would not file 1041. Let them put it on the personal returns. Just keep a file with the info in it to show that is what happened.

Kind of depends on whether you can reconstruct what should have happened. Preparing a 706 without a review of decedent's last tax return was not a particularly good idea.

Essentially you have a situation where the guy dies with dividend paying stocks which have a date of death value that should significantly reduce the 1099B total. The 1099 total represents all the dividends that accumulated since the year of death and, unfortunately, the cash that was in the account at death.

If you can determine what the stocks were, reconstruction is fairly straightforward

Kind of depends on whether you can reconstruct what should have happened. Preparing a 706 without a review of decedent's last tax return was not a particularly good idea.

Essentially you have a situation where the guy dies with dividend paying stocks which have a date of death value that should significantly reduce the 1099B total. The 1099 total represents all the dividends that accumulated since the year of death and, unfortunately, the cash that was in the account at death.

If you can determine what the stocks were, reconstruction is fairly straightforward

An attorney did the 706 and he did a fairly good job. I’m not sure how this was missed but the estate was a mess.

I think I’m gonna file a 1041 and pass the income to the beneficiaries that way....

I think I’m gonna file a 1041 and pass the income to the beneficiaries that way...

Just don’t use that old EIN…it would have purged by the IRS’ system by now…

I’m not sure how this was missed

Because attorney didn’t look at the guy’s 1040, as Dennis says.

I think I’m gonna file a 1041 and pass the income to the beneficiaries that way...

Just don’t use that old EIN…it would have purged by the IRS’ system by now…

I’m not sure how this was missed

Because attorney didn’t look at the guy’s 1040, as Dennis says.

Far be it for me to defend an attorney but the decedent was a bit senile, very wealthy and this account of about 100K May have been opened the year of death. I have been a CPA for 30 years and have seen bad and good work. This attorney did a good job. There were assets spread across the country like a jigsaw puzzle.

. Thank you, I will take your advice on the ID number. Thank you!

Would not the SOL passed?

Would not the SOL passed?

The 1099 s issued by NYS are for 2018. The client received the cash.

Did they break it out into capital, income, etc?

If so, it might be beneficial to file 1041 to retain character of the income Qual divs, etc.

It may take a decent probate attorney with tax experience to figure this out. Lots of missed opportunities here - brokerage houses send statements that the Personal Representative (Executor, Administrator) should have received. Current year 1099's would have been sent to decedent's address as well. I always look for the last filed 1040 even if I have to request a copy from the IRS. But getting that is often like pulling teeth. In some states unclaimed funds earn interest and that amount would be income to the recipients n the year received. [I wonder how the state got the tax id number of the estate in this scenario.] A well regarded estate attorney in Ohio is of the opinion that no 706 amended return is needed if a return was timely filed, closing letter received, and the statute of limitation is now passed. Brokerage houses generally have records going back 10 years. I suspect that there are records available for time periods prior to the funds being turned over to the state's unclaimed funds.

I would definitely file a 1041. Southpark has the background and knowledge level, as well as history and access to records to get all three bene's on the same page.