1099B Sale of stock from deceased parents

Forum|Forum|1 year ago
February 15, 2025
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My wife is the executor of the estate for her parents/family. Both parents are deceased, and their final tax filings were made for them in 2023. The estate has five beneficiaries. A stock ownership for her dad was discovered in 2023 but the sale was made in 2025 and the payout was put into the estate account managed by my wife in 2024. No taxes were withheld on the sale. Who reports this sale and how?

DianeW777

It depends. The sale can go through the estate and then divided to each beneficiary on their K1s for each of then to report the gain or loss on their individual returns.

If the sale came on a 1099-B in the name of either your wife or the decedent then you can use the nominee procedure outlined below to assign it to the estate EIN.

Nominee returns.

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received). You must also furnish a Form 1099 to each of the other owners.

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

On each new Form 1099, list as the payer the person on the original form and the other owner, as the recipient. On Form 1096, list the person on the original form as the nominee filer, not the original payer (financial institution). The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms:

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