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Subject Author Date
How To Report Inheritance Stuart A. Bronstein 03-09-2008
Posted by Stuart A. Bronstein on March 9, 2008, 4:37 pm
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 I was just asked a question and, since I don't do returns, I don't have
an adequate response.

Mother and daughter inherited stock on the death of the father. Mother
is non-citizen, non-resident. When the stock was cashed, the broker
sent a 1099-B in the name of the mother and daughter.

Daughter sent mother's half of the proceeds to her. Does the daughter
need to report this any way when she does her taxes?

Thanks for your insights.

Stu

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Posted by Benjamin Yazersky CPA on March 10, 2008, 1:47 pm
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 wrote:
> I was just asked a question and, since I don't do returns, I don't have
> an adequate response.
>
> Mother and daughter inherited stock on the death of the father. Mother
> is non-citizen, non-resident. When the stock was cashed, the broker
> sent a 1099-B in the name of the mother and daughter.
>
> Daughter sent mother's half of the proceeds to her. Does the daughter
> need to report this any way when she does her taxes?
>
> Thanks for your insights.
>
> Stu
>
> --


Whoever's soc sec # is on the 1099B should report 100% of the proceeds

Then back out the 50% held as nominee



___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] >>>
-----> real address on hobokeni or hobokenx <-----

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<< The foregoing was not intended or written to be used, >>
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Posted by Stuart Bronstein on March 10, 2008, 6:28 pm
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>> Mother and daughter inherited stock on the death of the father.
>> Mother is non-citizen, non-resident. When the stock was cashed,
>> the broker sent a 1099-B in the name of the mother and daughter.
>>
>> Daughter sent mother's half of the proceeds to her. Does the
>> daughter need to report this any way when she does her taxes?
>
> Whoever's soc sec # is on the 1099B should report 100% of the
> proceeds
>
> Then back out the 50% held as nominee

Thanks. Based on your clue I went to take a look at the instructions
for Schedule D. It says that someone who receives money as a nominee
for someone else should only include her own portion on her own
Schedule D, and include a separate statement showing who the other
recipient is and how much belongs to her.

Stu

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Mark Bole on March 11, 2008, 10:25 pm
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Stuart Bronstein wrote:

>>> Mother and daughter inherited stock on the death of the father.
>>> Mother is non-citizen, non-resident. When the stock was cashed,
>>> the broker sent a 1099-B in the name of the mother and daughter.
>>>
>>> Daughter sent mother's half of the proceeds to her. Does the
>>> daughter need to report this any way when she does her taxes?

>> Whoever's soc sec # is on the 1099B should report 100% of the
>> proceeds
>>
>> Then back out the 50% held as nominee

> Thanks. Based on your clue I went to take a look at the instructions
> for Schedule D. It says that someone who receives money as a nominee
> for someone else should only include her own portion on her own
> Schedule D, and include a separate statement showing who the other
> recipient is and how much belongs to her.

The last time I checked this (one minute ago), it only applied to
capital gains *distributions*, as reported on a 1099-DIV. I could not
find any IRS pub, including instructions for form 1040 Schedule D that
explained how to "nominee" ownership and sale (1099-B) of a capital
asset such as stock.

Was the stock ownership transferred via a trust or court-supervised
probate? Otherwise, how did someone sell the stock of a decedent?

The case you present is complicated by the non-citizen, non-resident
status of the second beneficiary (Mother). Is she subject to U.S. tax laws?

-Mark Bole

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Stuart Bronstein on March 11, 2008, 11:57 pm
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> Stuart Bronstein wrote:

>> Thanks. Based on your clue I went to take a look at the
>> instructions for Schedule D. It says that someone who receives
>> money as a nominee for someone else should only include her own
>> portion on her own Schedule D, and include a separate statement
>> showing who the other recipient is and how much belongs to her.
>
> The last time I checked this (one minute ago), it only applied to
> capital gains *distributions*, as reported on a 1099-DIV. I could
> not find any IRS pub, including instructions for form 1040
> Schedule D that explained how to "nominee" ownership and sale
> (1099-B) of a capital asset such as stock.
>
> Was the stock ownership transferred via a trust or
> court-supervised probate? Otherwise, how did someone sell the
> stock of a decedent?

State law permits transfer without probate if the value of the estate
is under a certain amount. Upon affidavit of the heirs to that
effect, the stock is transferred into the names of the heirs without
court order. Their heirs preferred the cash to the stock.

> The case you present is complicated by the non-citizen,
> non-resident status of the second beneficiary (Mother). Is she
> subject to U.S. tax laws?

That's part of the question. My guess is that the taxable income
will be small, if there's any at all, due to stepped up basis. But
the decedent was a US citizen and resident, and his assets were all
located in the US. So my guess is that, as far as his wife is
concerned it would be considered US source income.

Stu

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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