BobKamman
Level 15

I feel another case of "Trick the IRS Computer" coming on.  Why would there be a nominee distribution here?  Just report on the final return, any sales that happened before death.  Don't include any sales after death.  There is no Internal Revenue Code section that requires balancing a 1099 to a return.  Contrary to urban legend, the CP-2000 process is not 100% automated.  A real person looking at what the match kicks out, will notice the taxpayer is dead, and will notice the sales occurred afterwards.  

I would attach a one-paragraph explanation to the return, not that anyone will read it when filed, but a copy can be sent in the unlikely event that IRS reopens and asks about it next year.  OK, IRS is likely to reopen.  

It's true that IRS Pub 559 tells us to use the "Nominee Distribution" method on Schedule B, for interest and dividends received after death.  It also tells us to issue a 1099 to the nominee.  Were you planning on issuing a 1099B to the estate?  But the Schedule B procedure is for administrative convenience, and there are no such instructions for Schedule D.

0 Cheers