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My mother died in June 2023. At the time of her death she had a living revocable trust which had several brokerage accounts. The living revocable trust reported its income to the IRS using her Social Security number. After her death, The living revocable trust became an irrevocable trust and an EIN number was assigned to it. The assets from the living revocable trust were moved, in late July, to an account for the irrevocable trust. However, before that, on July 1, a bond came due.

The redemption of the bond, which is a taxable event, was reported under my mother's social security number on her 1099. I believe that this is wrong because you cannot report income under a person's social security number once they have passed.

I have asked the brokerage firm to remove the redemption of the bond from her individual 1099 and add it to the 1099 for the irrevocable trust. My broker says that he believes the 1099 is right because at the time the bond was redeemed in an account for the living revocable trust. However, they are going to look into it.

I think it matters and I believe I am right. Who is right?

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  • What's the value of the bond at stake? Jan 29 at 15:07
  • @Grade'Eh'Bacon The value of the bond is $25,000 and there is about $20 worth of market discount interest.
    – Bob
    Jan 29 at 15:40

1 Answer 1

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I think it matters and I believe I am right. Who is right?

Both are right.

That said, the executor of the estate will take this out of the personal tax return, and the trustee will add it to the trust tax return, both attaching a statement explaining the date issue, and that's it.

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  • If I understand what you are telling me, the personal return should differ from the 1099. That is likely to generate an IRS notice. Also, how do attach the statement if the return is being filed electronically?
    – Bob
    Jan 29 at 20:04
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    It won't generate notice. You'll report the 1099 as is, and then a negative adjustment. Any tax preparation software allows adding statements to the return.
    – littleadv
    Jan 29 at 20:15

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