Estate Tax

Posted by Andrew on February 7, 2009, 9:01 am

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glass wrote:

> True, however, the tax newsgroups are missing experienced

> participants but thanks for the misc.taxes.moderated

> possibility. I will check it out.

Trust me -this one (misc.taxes.moderated) is NOT missing inexperienced
posters! Your original post might take a day or so to appear since it is
moderated. Good luck, hope to see you over there!

--
-------------------------------------------------------------
Regards -

- Andrew

Posted by R. C. White on February 7, 2009, 8:51 pm

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Hi, Glass.

When you post to misc.taxes.moderated, be sure to give them enough
information in your first post to at least make a preliminary stab at an
answer. I haven't visited that newsgroup in years but I recall that some
very competent tax experts were regulars there.

How large is that "very small estate"? To some folks, a million dollars is
"very small". Give at least an approximate number. Sometimes a final
estate is "very small" because major assets were disposed of before death,
by gifts or otherwise, and these may need to be accounted for in the estate
settlement.

In a later post, you said the dividend is $2,000. That indicates an
investment probably worth several thousands, maybe hundreds of thousands of
dollars.

Who got that stock? Who cashed the dividend check? Was there a will? Has
the estate been formally distributed and closed by a court?

No, I'm not asking you to tell us here, but no competent tax advisor can
give you good advice without knowing all the facts.

In the simplest estate, where a sole heir (your wife?) has already obtained
legal ownership of the dividend-paying stock before the dividend was paid,
then this is simply the heir's income and should be reported on his/her
return. But if the estate was still in probate or administration, then Form
1041 would be required for each year (and each short fiscal year) from date
of death until the estate is distributed and closed. And, of course, it
should report ALL the estate's income and deductions, not just this
dividend. A part of the 1041 is a Schedule K-1 for each income beneficiary;
each beneficiary should include income from his/her K-1 on his/her Form
1040.

Remember that I've been retired for nearly two decades and there have been a
lot of changes in those years. Be sure to check with your own CPA for the
current rules - even after getting "generic" advice from a tax newsgroup.

RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Using Quicken Deluxe 2009 and Windows Live Mail in Win7 x64)

> Its unfortunate Intuit doesn't have a Turbotax newsgroup...anyway, I hope

> someone can give me a little insight:

> My mother-in-law died in 2007 with a very small estate so we filed a 2007,

> 1040 final decedent return.

> However, a dividend payer made a payment to the deceased person in January

> 2008 with the SSN of the deceased.

> Thus, in 2009, we received a 1099-DIV, with the deceased persons SSN which

> has to be dealt with.

> Anyone know how to handle this???

> IRS says to obtain a estate EIN, file a 1041 with a K-1 identifying the

> beneficiary, then the beneficiary will add the K-1 income to his return

> for 2008. Sounds easy but a 1041 is a nightmare and the long term impact

> of this process is unknown and may have some impact on the closed probate.

> Any thoughts on this also will be appreciated???

> --

Posted by glass on February 8, 2009, 8:34 am

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Thanks guys...sorry for the off-topic post.
--

> Hi, Glass.

> When you post to misc.taxes.moderated, be sure to give them enough

> information in your first post to at least make a preliminary stab at an

> answer. I haven't visited that newsgroup in years but I recall that some

> very competent tax experts were regulars there.

> How large is that "very small estate"? To some folks, a million dollars

> is "very small". Give at least an approximate number. Sometimes a final

> estate is "very small" because major assets were disposed of before death,

> by gifts or otherwise, and these may need to be accounted for in the

> estate settlement.

> In a later post, you said the dividend is $2,000. That indicates an

> investment probably worth several thousands, maybe hundreds of thousands

> of dollars.

> Who got that stock? Who cashed the dividend check? Was there a will?

> Has the estate been formally distributed and closed by a court?

> No, I'm not asking you to tell us here, but no competent tax advisor can

> give you good advice without knowing all the facts.

> In the simplest estate, where a sole heir (your wife?) has already

> obtained legal ownership of the dividend-paying stock before the dividend

> was paid, then this is simply the heir's income and should be reported on

> his/her return. But if the estate was still in probate or administration,

> then Form 1041 would be required for each year (and each short fiscal

> year) from date of death until the estate is distributed and closed. And,

> of course, it should report ALL the estate's income and deductions, not

> just this dividend. A part of the 1041 is a Schedule K-1 for each income

> beneficiary; each beneficiary should include income from his/her K-1 on

> his/her Form 1040.

> Remember that I've been retired for nearly two decades and there have been

> a lot of changes in those years. Be sure to check with your own CPA for

> the current rules - even after getting "generic" advice from a tax

> newsgroup.

> RC

> --

> R. C. White, CPA

> San Marcos, TX

> (Retired. No longer licensed to practice public accounting.)

> rc@grandecom.net

> Microsoft Windows MVP

> (Using Quicken Deluxe 2009 and Windows Live Mail in Win7 x64)

>> Its unfortunate Intuit doesn't have a Turbotax newsgroup...anyway, I hope

>> someone can give me a little insight:

>> My mother-in-law died in 2007 with a very small estate so we filed a

>> 2007, 1040 final decedent return.

>> However, a dividend payer made a payment to the deceased person in

>> January 2008 with the SSN of the deceased.

>> Thus, in 2009, we received a 1099-DIV, with the deceased persons SSN

>> which has to be dealt with.

>> Anyone know how to handle this???

>> IRS says to obtain a estate EIN, file a 1041 with a K-1 identifying the

>> beneficiary, then the beneficiary will add the K-1 income to his return

>> for 2008. Sounds easy but a 1041 is a nightmare and the long term impact

>> of this process is unknown and may have some impact on the closed

>> probate. Any thoughts on this also will be appreciated???

>> --

Posted by R. C. White on February 8, 2009, 4:31 pm

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Hi, Glass.

It's not off-topic. We often discuss TurboTax topics here, especially this
time of year. Since there is no separate TurboTax newsgroup, this one is
about as close as you'll be able to find.

But your question might require more tax expertise than you realize, and
more than we can give you in this "generic" newsgroup. You probably need
the more tax-focused expertise available in the moderated newsgroup. You
may also need to discuss this with a probate attorney in your own community.
And, as I indicated, your best tax advice would no doubt come from your own
CPA, to whom you could disclose details that you should not post in a public
group like this one.

Good luck. And please let us know if we can help further.

RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Using Quicken Deluxe 2009 and Windows Live Mail in Win7 x64)

> Thanks guys...sorry for the off-topic post.

> --

>> Hi, Glass.

>> When you post to misc.taxes.moderated, be sure to give them enough

>> information in your first post to at least make a preliminary stab at an

>> answer. I haven't visited that newsgroup in years but I recall that some

>> very competent tax experts were regulars there.

>> How large is that "very small estate"? To some folks, a million dollars

>> is "very small". Give at least an approximate number. Sometimes a final

>> estate is "very small" because major assets were disposed of before

>> death, by gifts or otherwise, and these may need to be accounted for in

>> the estate settlement.

>> In a later post, you said the dividend is $2,000. That indicates an

>> investment probably worth several thousands, maybe hundreds of thousands

>> of dollars.

>> Who got that stock? Who cashed the dividend check? Was there a will?

>> Has the estate been formally distributed and closed by a court?

>> No, I'm not asking you to tell us here, but no competent tax advisor can

>> give you good advice without knowing all the facts.

>> In the simplest estate, where a sole heir (your wife?) has already

>> obtained legal ownership of the dividend-paying stock before the dividend

>> was paid, then this is simply the heir's income and should be reported on

>> his/her return. But if the estate was still in probate or

>> administration, then Form 1041 would be required for each year (and each

>> short fiscal year) from date of death until the estate is distributed and

>> closed. And, of course, it should report ALL the estate's income and

>> deductions, not just this dividend. A part of the 1041 is a Schedule K-1

>> for each income beneficiary; each beneficiary should include income from

>> his/her K-1 on his/her Form 1040.

>> Remember that I've been retired for nearly two decades and there have

>> been a lot of changes in those years. Be sure to check with your own CPA

>> for the current rules - even after getting "generic" advice from a tax

>> newsgroup.

>> RC

>>> Its unfortunate Intuit doesn't have a Turbotax newsgroup...anyway, I

>>> hope someone can give me a little insight:

>>>

>>> My mother-in-law died in 2007 with a very small estate so we filed a

>>> 2007, 1040 final decedent return.

>>> However, a dividend payer made a payment to the deceased person in

>>> January 2008 with the SSN of the deceased.

>>>

>>> Thus, in 2009, we received a 1099-DIV, with the deceased persons SSN

>>> which has to be dealt with.

>>> Anyone know how to handle this???

>>>

>>> IRS says to obtain a estate EIN, file a 1041 with a K-1 identifying the

>>> beneficiary, then the beneficiary will add the K-1 income to his return

>>> for 2008. Sounds easy but a 1041 is a nightmare and the long term impact

>>> of this process is unknown and may have some impact on the closed

>>> probate. Any thoughts on this also will be appreciated???