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Old 03-04-2015, 02:17 PM
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Did to minimize impact of US EE Bond interest on estate income tax

My mother passed away in Sept, 2014. I am the executor of her estate. I had to cash some US EE Savings Bonds she had to distribute to the estate beneficiaries. The bank where I cashed them, reported the interest income to the estate's tax payer ID.

I am now filing my mother's 2014 individual tax return for which her medical bill deductions cause her taxable income to be zero. However, the estate income tax reported on Form 1041 has no deductions but a lot of interest income from the bonds. I don't believe I'm allowed to deduct any of her funeral costs or medical bills paid by the estate after her death. So the income is being taxed at 39% and there is a lot of it.

Is there any way to transfer that interest income from the estate to my mother's individual return? Or can I make any other deductions from the estate income return to reduce the taxes?

If I had known about this situation, I would have had her cash in the bonds prior to her death so they would come under her individual return.

Any thoughts?

Thanks



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Old 03-06-2015, 12:50 PM
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Need help to minimize impact of US EE Bond interest on estate income tax

I was hoping to get some insights from this forum.



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