1099-DIV in deceased persons name & SS#

[abs96]

Client received 1099-DIV in deceased husband's name & SS#.  The account is only in husband's name.  Husband died Oct. 2020.  I already filed a final return in 2021 for federal and state returns.  I am assuming I will have to file a tax return for federal and state using the husband's name.  The surviving spouse has been trying to get this account changed over to her name since his death.  Finally it happened in 2022.

[sjrcpa]

This goes on an estate 1041.

[BobKamman]

A 2021 1040 is not filed for a 2020 decedent.  You might have to file a 1041 for his estate, but that's the long way around the barn if the widow constructively received the funds (or the new shares, if this was a dividend reinvestment account).  Which means, amend her 2021 return if she failed to tell you about this.  

[Just-Lisa-Now-]

How much $$ are we talking about?

[abs96]

This was the only investment account in the husband's name only, everything else was held jointly.  We have 3 funds within 1 account (Mainstay Funds).  Total ordinary dividends $976.62; Total qualified dividends $48.27; Total capital gain distributions $1184.09.

I think it would be easier to put it on the wife's return for 2021 (working on her return now).  I don't think they had to file an estate return.  Do I document anywhere that it was for the husband.  She would be filing as single, correct? or married filing joint?

[abs96]

Ordinary dividends - $976.62; Qualified dividends $48.27; Capital gain distributions $1184.09

[sjrcpa]

That meets the requirement for having to file an estate 1041.

But, what would happen if you amended the wife's return and included it there? 🤔

[abs96]

I am working on the wifes return for 2021 now.

[BobKamman]

If she got the money it's income in respect of decedent -- goes on her return.  How did she resolve the issue, by filing a "Small Estate Affidavit"?  Which probably said that all taxes had been paid.  

[abs96]

All the dividends were reinvested into the funds.  Since the account was only in her husband's name only, she had to file a Short Certificate to be able to put the account in her name.  No estate taxes were filed.  As of 2022 the account is in her name only.  She has not taken any money out of the fund.

[BobKamman · Accepted solution]

"Short Certificate" seems to be peculiar to New Jersey, where they don't trust people to pump their own gas either.  You have to go to the courthouse and fork over at least $100 cash, to resolve a simple problem like this?  Or maybe it's Delaware. 

Put it on her return, and explain to her "stepped-up basis" so she can sell it before her heirs have the same problem.  

Edited to add:  Or it looks like you may be in Pennsylvania, where they do things the way most states gave up 50 years ago.  

[abs96]

I did put it on her return.  Had the same thought, she should sell it so her heirs don't have the same problem.  Ah yes, Pennsylvania.  Thanks for all your help.