Filing Form 1041 for Decedent's Estate

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February 11, 2025
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Filing 1041 for Decedent's Estate for Stock Sold after Death and reported on Form 1099-R and 1099-B for the same Proceeds (1099-B) and Distribution (1099-R) amounts.

Boxes of 1099-R filled with info are 1, 2a, Total Distribution Checked, 6-NUA, 7-Code 4 (Death).

Boxes of 1099-B filled with info are Form 8949 - E, 1a, 1c, 1d - Proceeds which match Gross Distribution on 1099-R, 5 checked for noncovered security and 6-Gross reported to IRS.

1099-R is filed on Form 1041 Line 8 "Form 1099-R Distr Code 4 ESOP

I understand that 1099-B is filed on Form 8949 Part II E - LT basis unreported to IRS, with description of Stock, Dated acquired "Inherited", Date Sold, Proceeds from 1d of 1099-B, Basis is entered as the NUA from 1099-R, which ends up with the Gain in Column H (which matches the Taxable Amount 2a on 1099-R). This is then transferred to Form 1041, Line 4. At this juncture, the amount on Form 1041, Line 4 and Line 8 are the same amounts.

This info is then transferred to Schedule D Part II, Part III and then Part V is the Tax Computation combining the two 1099's totals in the AGI for Taxable Income Calculation.

It appears that this is duplicating the Gain amount. Should both 1099-R and 1099-B be reported this way on the Income Section of Form 1041?

Could you please help me understand what I have missed?

Thank you,

Ladybug_09

RobertB4444

Since the amount that is taxable has been reported on two forms then you should only be entering one or the other. I would enter only the 1099-R since that is reporting the distribution.

Delete all information from the 1099-B from the return. Entering both forms is duplicating the taxable gain. The 1099-B should be describing activity inside the retirement account prior to its distribution anyway and not be describing taxable activity until it is withdrawn.

@Ladybug_09

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