Estate Tax

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???
Reply to
glass
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Reply to
Stevey

Seems to me this isn't a Turbotax question. I didn't see that word in the meat of your message. You might consider taking this to a tax NG; I'd suggest misc.taxes.moderated.

Reply to
Andrew

Unfortunately it more than $600, its ~$2000

Reply to
glass

True, however, the tax newsgroups are missing experienced participants but thanks for the misc.taxes.moderated possibility. I will check it out.

Reply to
glass

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!

Reply to
Andrew

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

Reply to
R. C. White

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

Reply to
glass

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

Reply to
R. C. White

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