1099-R in name and TIN of deceased instead of beneficiary

[jane123]

An IRA owner had systematic distribution on a monthly basis from his IRA. he died in September 2004, but the distributions continued.

The Bank was never notified of his death until Last week (February 2005). Now the beneficiary wants us to change the reporting and issue the 1099-R for the September, October, November and December distributions in the name and TIN of the beneficiary (and the name of the deceased- like an inherited IRA).

The Bank is saying they cannot do that, because the beneficiary did not request a the distributions, and that the beneficiary should have their tax person handling any correction on the tax returns.

Is the Bank required to fix the reporting?

Thanks very much for your help.

Jane

PS. Also posted in Distributions Forum.

[Demosthenes]

Two assumptions:

1) Somebody cashed the checks made payable to the deceased. Hopefully, this someone had a Power of Attorny that made it possible to cash cheks payable to the deceased

2) A Beneficiary Distribution Account (BDA) was not established.

If both are true, then I don't see where there is much that the Bank can do. They were not notified of the death and did not establish an IRA-BDA, they did not make the distribution to the Beneficiary.

[mbozek]

This is not the payor's problem because the bank was never notified of the death of the owner. For tax purposes only payments received before the death of the owner will be taxed to the owner. Payments made after death should have been paid to the estate which would then pay the beneficiary of the IRA. The estate deducts the amount paid to the bene and the bene is taxed on the income. The tax preparer for the estate will correct the allocation of income.

[jane123]

Demo, your assumptions are right.

Thank you both very much. Very helpful information

Jane

[Demosthenes]

One more thought, your original post stated

"An IRA owner had systematic distribution on a monthly basis from his IRA. he died in September 2004, but the distributions continued"

Was this a required minimum distribution? It's unusual, but in some circumstances (e.g. spousal beneficiary, where the spouse is older than the deceased) the RMD amount can actually rise after the date of death. Off topic from your original question, but I ran into something similar recently.

[jane123]

It was an RMD. The extra amount would cause the distribution to be a little more than the RMD. They were thinking of rolling over the extra amount, but I do not think they can do that , as there is no one to sign the rollover request form.

I came across a situation like yours as well. The RMD went up the year after the year of death- the beneficiary was the uncle (older) of the deceased