Answer

Hello XXXXXXXX:

All the children of your late mother have no problem here.

That's about $3000 in interest income reported to the US Treasury on a Form 1099 for your mother.

It is your mother's income in 2007 rather than your income and you should prepare a final Form 1040 for your mother; even if there is no tax due or refund, there would be a return that showed the $3000 income properly reported on your mother's return. If your mother's taxable income for the year was too small to generate a tax due, it is still a good idea to file it so that the IRS can register that the $3000 on the Form 1099 from the bank was, indeed, reported on a tax return.

As far as the $500 for each child, it's just additional non-taxable inheritance from your mother, not taxable income.

If the interest income was earned from accounts owned by each child, then it would be their interest income, but that is not the case here and you would be reporting interest income that is not attributable to you.

Glad I could help and I share your grief. After losing my father recently, I have an emptiness that can never be closed.

 

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Balanor

 

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