Closed Estate Received 1099-B and 1099-Int

[Yardley CPA]

Client included a 1099-B and 1099-Int for his father's estate which was supposedly closed many years ago.  He, along with his sister were co-executors and split the estate evenly.  The 1099-B includes sales price of stocks/bonds amounting to a little over $8,000.  He has no idea what the basis of the stock was at the date of death.  I could research that.  The INT is for less than $40.  These forms were received from the State's Unclaimed Property Department.  Any idea what to do in this instance.  I assume these funds need to flow to my client and his sisters 1040?  How?  Normally it would be through a K1, no?  Since the estate was closed years ago, what can be done?

Thank you. 

[Gail in Virginia]

I suggest filing a 1041 for the income, making your fee exactly equal to the amount of the income, and closing the books.  Just kidding. 

[Terry D EA]

Wouldn't this fall under the same statutes for companies to file claims against an estate?? I thought once closed always closed unless it remained open for litigation purposes. I have dealt with this for the last 14 years with my father's asbestos claims. Only reason the estate is open is for litigation and all proceeds are distributed to the surviving spouse. I do Medicare can impose estate recovery after the estate is closed. With this said, this is the court part of things and not the tax part.

So, for your situation, I think you could re-open a 1041 and distribute accordingly with the K-1 but what I don't know if there is a requirement to do so because the estate is closed. Was the 1041 marked as final? The only other thing I can think of is line 21 other income for your client(s). Each would report $4020.00 of income. Wouldn't the impact be the same if it were distributed using the K-1?

[jasdlm]

Were they able to negotiate the checks?  Did they 1099s come in the estate SSN?  You could reopen the estate, or, if they were able to negotiate the checks (not sure how), you could claim the income as IRD, keep records to respond to CP2000, and move on.  This might not fly with technical peeps, and I understand, but it will be costly to reopen the estate.  

[Yardley CPA]

The 1099's came in the deceased / estate  social security number.  Appreciate everyone's input.  

[Terry D EA]

I don't think you have any choice but to reopen a 1041 because of the information on the 1099's.