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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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My father passed away last year. I am doing both his 2009

Resolved Question:

My father passed away last year. I am doing both his 2009 taxes plus my own. There were some CD's - one POD and one with my name also on the account. I have the 1099 forms but cannot tell when the interest was paid. I am assuming that if the CD earned the interest prior to his death it would go on his taxes, and if after that, it will go on mine. Also, if it was paid at the time the CD was cashed out, is that on my taxes? There was no "estate" as probation was not required. Thanks.
Submitted: 6 years ago.
Category: Tax
Expert:  Merlo replied 6 years ago.

Hello JA Customer,


The interest on the CD's would be paid by the person who actually cashed in the CD's. If the 1099 form was issued to your father on either of the CD's then you would include the interest paid on his final return. Any 1099 issued in your name for a CD should have the interest reported on your own personal return. It is not determined by when the interest accumulated, but rather by the date the CD was cashed in, and the 1099 should have been issued under the name and SS number of the person who actually cashed in the CD.



Thank you JA Customer



Customer: replied 6 years ago.



thanks. The 1099s made out to my father.... obviously he did not cash them in. this seems like the bank made a mistake. What if the CD is left to mature. Then doesn the date the interest was paid count?

Expert:  Merlo replied 6 years ago.

Hello again JA Customer,


The interest accrues either monthly or quarterly or whatever the terms of the CD interest might be. But the tax is not typically paid until the CD is actually cashed in, and then all of the accrued interest becomes taxable in the year the CD is surrendered.


If the 1099's were issued in your father's name, then it is most likely because the account information had not been updated to show you as the new account owner. If the 1099's were issued under your father's name and SS number, then the interest reported on those forms should be part of the taxable income you report on your father's return for the year. The bank would not now issue a new or corrected 1099 form if their records indicated that your father was still the owner of the CD at the time it was cashed in. They would just simply consider this part of his estate in which case the interest is reported on his return.



Thank you JA Customer



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