cshiflett[at]att.net wrote:

I was hoping someone else would answer this, as the
other reply I see is, at best, incomplete.

- quote -

I don't know. Probably, what would need to be done is
to reference the code section on 1040 schedule B. From
other discussions here, the children might need to
issue nominee 1099s to the estate, and would need to
quote the same code section on THEIR schedule B's as a
explaination for the subtraction.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

cshiflett[at]att.net posted:

- quote -

If the 1099s are actually made out to the children (age
matters), _they will have to report it on their returns.
From your facts, I don't see any way around this, though if
the children are under 14, you have the option of adding it
to your income under certain conditions.

Chapter 33 of Pub 17 has full info on investment income to
minor children.

- quote -

Nothing, if the bonds were cashed by the children and the
1099s are issued in their names and SSNs. If you want to
have the estate pay the interest, you could attempt to have
the 1099s switched (though I doubt that's possible, once the
bonds are converted to cash by another). Alternatively, you
might reimburse the children from the estate's assets for
any tax due -- presuming you are the "personal
representative" or "executor" -- as a reflection of the
wishes of the decedent.

But that last supposition breaks into legal ground, and I
would recommend a check with your attorney or the court
clerk if you're working with one.

Bill

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I am going to file a tax return for my mother, who
died in late Nov. '04. She had HH bonds, which were
co-owned by her children. The children cashed the
HH bonds, and each child will receive a 1099-INT
showing the amount of the deferred interest (the
HH bonds are a result of a conversion of EE bonds,
which had deferred interest). The income tax on the
deferred interest will be paid on my mother's final
return.

My question is: What documentation, if any, needs to
be attached to my mother's final return to show that
she paid the proper amount of taxes on the deferred
interest?

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->