1099R with no Social Security number

[Guest Judy S]

A terminated participant in a profit sharing plan received a distribution in 2004 of substantially all of her benefit. She then died. Her account was then credited with about $12 of interest which was then paid to her surviving spouse.

The spouse has moved out of state and no one knows how to get in touch with him. Unfortunately, no one has his SSN either.

My question-how to report the distribution on the 1099-R? Could we include it on the participant's 1099 since the amount is so small? I'd like to do the right thing, but can't see doing a 1099 without a SSN and without a current address.

I'd appreciate any suggestions anyone has. Thanks.

[Appleby]

How about charging a legitimate fee of $2.01, then you won’t need to report the $9.99 balance.

I don't think you can report withdrawals to the beneficiary if they occurred after the beneficiary's death

[SoCalActuary]

If you report the income to the participant's SSN, then it is the duty of the executor of the estate to divide the income between the participant's taxes and the estate's taxes.

If I were doing this, I would use the original 1099 SSN, as the only practical method.

[mbozek]

SC- Where did you get that novel idea on fed. estate taxation which only applies if the estate is more than 1.5M? All property owned by a decedent at death is included in the gross estate which may be subject to estate tax. The payment is also taxable income to the payee, which could be the estate. The estate can claim a deduction from income tax if the payment is distributed to a beneficiary of the estate but no deducton is permitted from the estate tax. The only interesting question is whether the $12 was paid before she died in which case it is included in her estate. If paid after death it is taxable as IRD to the estate but is not included in the gross estate.

[SoCalActuary]

The aount was so small, I didn't even worry about the estate issues, simply who pays the income tax. My answer was - let the executor decide based on the date received.

It was intended as a simple practical way to discharge the obligation to issue 1099.

[Guest Judy S]

I just found out that I was wrong about some of the facts-she terminated in 2001 and received the bulk of her money in 2003, so we did a 1099 for her last year. She then died, and after she died, the $12 was paid to her husband as beneficiary. So, we don't have the option of adding the $12 to her distribution. I think what I will do is use her SSN and indicate her estate as the recipient. We'll send it to the last known address in our files and hope that it is forwarded to the husband at his new address. If it is returned, I'm not sure what recourse we'll have, but since the amount is so small (why couldn't it have been just a couple dollars less?), I'm inclined to let it go at that. Does anyone see any problem with this? Thanks for all your comments!