Interest on CD's from father's estate

[lmg]

What is the name of your state (only U.S. law)? Texas

My father passed away last year. He had some CD's which were all either in my sister's or my name (in addtion to his name), or were POD to us. We have cashed in some, but at least one is still left to draw interest.

I have the 1099 forms, all of which were issued with my fathers name on them, with his SSN. In some cases my and my sister's names are also on the account, but only my father's SSN is there. We did not update the names on the account, but did inform the two banks, and thought they would update. so my question is - who owes the tax? Does it depend on to whom the 1099 is issued, or when the interest was added or paid to the CD? Also, there was no "estate" as probate was not required. Thanks.

 

[justalayman]

did you file taxes for your fathers final year and for his estate?

We did not update the names on the account, but did inform the two banks, and thought they would update.

does that mean you just told them in passing your father had died? Other than that, it doesn't really make any sense.



the interest on the CD's belongs to the owners of the CD's. If they were jointly held, TOD, or POD, they became the beneficiary or joint owners at the time of death of your father. Any interest earned after that point is the bene's. Any interest prior to that time is your fathers.

Does it depend on to whom the 1099 is issued

Not if the 1099's were in error.

 

[lmg]

I am in the process of filing his taxes. Is it correct that the IRS will expect the interest income to go to the individual whose SSN is on the 1099?

thanks.

 

[justalayman]

that is what they would expect. It still doesn't make it correct. However you file the interest income will probably never be questioned unless somebody gets audited.