2012 New York State tax question

Inheritances are generally not subject to income tax. However to the extent the estate itself has taxable income on the principal amount left, either the estate or the beneficiaries can be taxed, generally at the option of the executor.

Assuming there is taxable income, you will probably need to claim it on your California return, but you get a credit for the tax you pay to New York.

I don't do returns myself, and others here who do will likely have additional and/or better information for you.

Inheritances are generally not subject to income tax. However to the extent the estate itself has taxable income on the principal amount left, either the estate or the beneficiaries can be taxed, generally at the option of the executor.

Assuming there is taxable income, you will probably need to claim it on your California return, but you get a credit for the tax you pay to New York.

I don't do returns myself, and others here who do will likely have additional and/or better information for you.

Followup from OP that was buried below the sig:

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probated a year or so after that. Recently it was discovered that she had bought some Apple (AAPL) stock in the 1980's that had somehow gotten lost and ended up in New York State Unclaimed Funds.

inadvertently sold even though the siblings desired to have the actual shares instead of the capital gain. Not sure who to blame (the Dumb and Dumber law firm, Unclaimed Funds, the sibling acting as executor, or all of the above?) In any case, the stock was sold which has resulted in a substantial capital gain for either the estate or the siblings, as the value of AAPL has exploded since 1994.

that he will prepare a 1041 filing and k-1's for each sibling. There was no mention of having the estate pay the tax instead of each sibling and the executor has recently sent the proceeds to each sibling.

buy a New York state tax package from TT as I do a California tax package each year. But I?m trying to get a handle on my taxes before the end of the year as I may want to sell some stock before then.

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The capital gain income from intangibles (the stock) is sourced to the state of residency, in your case California, so I don't see where you need to file or pay anything to NY. If the gain had been from the sale of real estate located in NY, that would be a different matter.

At least, that would be the reasonable approach. I'm sure NY state version of the 1041 form has questions about which beneficiaries and/or executors are residents of NY, and they might have some whacky law where they do claim somehow that this is NY source income, but I'd be surprised and disgusted if that were the case.

Another thought occurs: did Apple pay any dividends since 1994 (I'm too lazy to look it up right now)? That could complicate the basis calculations if dividends were reinvested, as well as there being possible issues with unpaid taxes on those dividends if they were taxable to the estate.

That's a great point. The probate estate was closed. The final order (in California, at least) generally identifies who owns property of the estate that is discovered later. As a result the stock was owned by the beneficiaries when it was sold, not by the estate.

Followup from OP that was buried below the sig:

-----------------------------------------

probated a year or so after that. Recently it was discovered that she had bought some Apple (AAPL) stock in the 1980's that had somehow gotten lost and ended up in New York State Unclaimed Funds.

inadvertently sold even though the siblings desired to have the actual shares instead of the capital gain. Not sure who to blame (the Dumb and Dumber law firm, Unclaimed Funds, the sibling acting as executor, or all of the above?) In any case, the stock was sold which has resulted in a substantial capital gain for either the estate or the siblings, as the value of AAPL has exploded since 1994.

that he will prepare a 1041 filing and k-1's for each sibling. There was no mention of having the estate pay the tax instead of each sibling and the executor has recently sent the proceeds to each sibling.

buy a New York state tax package from TT as I do a California tax package each year. But I?m trying to get a handle on my taxes before the end of the year as I may want to sell some stock before then.

---------------------------------

The capital gain income from intangibles (the stock) is sourced to the state of residency, in your case California, so I don't see where you need to file or pay anything to NY. If the gain had been from the sale of real estate located in NY, that would be a different matter.

At least, that would be the reasonable approach. I'm sure NY state version of the 1041 form has questions about which beneficiaries and/or executors are residents of NY, and they might have some whacky law where they do claim somehow that this is NY source income, but I'd be surprised and disgusted if that were the case.

Another thought occurs: did Apple pay any dividends since 1994 (I'm too lazy to look it up right now)? That could complicate the basis calculations if dividends were reinvested, as well as there being possible issues with unpaid taxes on those dividends if they were taxable to the estate.

On 2013/12/09 08:33, Bobster wrote: [...]

When you reply, you should delete the boilerplate "signature" text (the part with the disclaimer and the reference to asktax.org). In general, you should also delete redundant or irrelevant text, as I did with this reply.

Your replies are coming through "hidden" at the bottom, where not everyone will notice them.

Depending on your newsreader, you may not even be seeing the "sig" text, maybe there is a display option you need to select?