On Feb 18, 3:10*pm, George <gbecc...[at]gmail.com> wrote:
- quote -

George, that is my conclusion as well. The one exception are Savings
Bonds where the interest can be shown as income as it accrues,
including the final return.

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On Sat, 16 Feb 2008 13:10:11 EST, sethb[at]panix.com (Seth) wrote:

- quote -

FWIW, my conclusion - based on (a) the general tone of some of the
responses, and (b) that the IRS instructions don't include an example of
pro-rating the income, is that the final return gets income that's
credited before death, and the estate gets anything credited thereafter.

IOW, they don't mean "accrued" in the sense of "accrual method". It's
kind of pocket change in my case, so I'd probably be safe either way.

Thanks to all who replied.

G

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On Feb 16, 10:10*am, se...[at]panix.com (Seth) wrote:
- quote -

bonds that were redeemed shortly after Mom passed away. The
difference in my case between showing the accrued interest in her
final return or not is that her medical deductions substantially
exceed her income. The accrued interest sops up some of that under-
utilized deduction, so to speak. Is it improper to show the accrued
interest on her final return?

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In article <fp5tbo$jk2$1[at]snarked.org> ,
D. Stussy <replies[at]newsgroups.kd6lvw.ampr.org> wrote:
- quote -

The instructions appear to say that in this particular case, even
though the decedent used cash accounting, it's proper to use accrual
accounting for this particular purpose.

I don't know what the Regs say.

- quote -

I'm not one.

Seth

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"George" <gbeccles[at]gmail.com> wrote in message
news:h5jcr3h51p5kofrnksm3ac8476drha03pa[at]4ax.com...
- quote -

Not under cash accounting as it wasn't PAID (or placed into the account).

This obviously confuses you. Go see a tax expert.

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"removeps-groups[at]yahoo.com" <removeps-groups[at]yahoo.com> wrote:
- quote -

The final return is income tax. The alternative valuation date is with
respect to estate tax. They have little or nothing to do with each
other.

Stu

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On Fri, 15 Feb 2008 19:27:24 EST, "D. Stussy" <spam[at]bde-arc.ampr.orgwrote:

- quote -

Yeah. The question is, should interest 'earned' before death, but not
credited until after death (ie, during the last statement period) be
include on the 1040, or the the estate's 1041?

G

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"George" <gbeccles[at]gmail.com> wrote in message
news:i92br3tk0h6phr2apdke4fvj55uoc761to[at]4ax.com...
- quote -

Which for an individual using cash accounting will mean everything earned
that wasn't included on the decedent's 1040.

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On Feb 15, 10:20*am, George <gbecc...[at]gmail.com> wrote:

- quote -

Page 7 of the instructions for form 706 say:

<QuoteInterest. Interest accrued to the date
of the decedent's death on bonds,
notes, and other interest-bearing
obligations is property of the gross
estate on the date of deaht and is
included in the alternative valation.
</Quote
But I have no idea what the alternative valation is.

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On Feb 14, 8:04*am, George <gbecc...[at]gmail.com> wrote:

- quote -

The instructions for form 706 say

Which Estates Must File
For decedents dying in 2007, Form 706
must be filed by the executor for the
estate of every U.S. citizen or resident
whose gross estate, plus adjusted
taxable gifts and specific exemption, is
more than $2,000,000

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On Thu, 14 Feb 2008 17:47:09 EST, "D. Stussy" <spam[at]bde-arc.ampr.orgwrote:

- quote -

OK, I guess. The 1041 instructions say "All accrued income of a
decedent who reported his or her income on the cash method of
accounting, ..."

G

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"George" <gbeccles[at]gmail.com> wrote in message
news:s5m6r3l4sdk8knlup5coqqdgr2pb0cs4lc[at]4ax.com...
- quote -

The first rule is that you have to apply her accounting method. The
proration you described is accrual accounting, while most individuals use
cash accounting.

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On Wed, 13 Feb 2008 21:09:18 EST, Benjamin Yazersky CPA
<byaz55[at]lycos.com> wrote:

- quote -

Really? The total value of the estate is decidedly under $2M. Under
$1M, even. Quite a bit under.


- quote -

G

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On Feb 13, 4:45 pm, George <gbecc...[at]gmail.com> wrote:
- quote -


Before you can do the 1040 and apply any IRD, you have to do the 706
first.
Its quite complex and I'm not going to even try to explain it in this
space.

You should work with your CPA/tax advisor and tax atty (if preparing
the 706).

IRD is definately NOT a do it yourself thing.




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My mother died last June. I'm executor for her estate, which consisted
mostly of CD's and bank accounts, and a few stocks. Total interest
income is about $10K. In doing her final return, I have a question WRT
"Income in Respect of a Decedent (IRD)":

How should interest from a statement period that spans her death be
treated? It was paid after she died, but part of it was earned while
she was alive. Should it be pro-rated by the days she was alive?

The same question, for stock dividends.

Thanks,
George

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