cronewitch
Junior Associate
I identify as a post-menopausal childless cat lady and I vote.
Joined: Dec 20, 2010 21:44:20 GMT -5
Posts: 5,989
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Post by cronewitch on Mar 11, 2014 20:08:04 GMT -5
Mom died June 25 and we filed 1040 for her. Now her estate has collected some interest income and we don't know if we need to file an estate tax return to report that income it was about $6,000. Do we need to file a 706 form?
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grits
Senior Member
Joined: Dec 17, 2012 13:43:33 GMT -5
Posts: 3,185
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Post by grits on Mar 11, 2014 20:31:19 GMT -5
Talk to an accountant.
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mwcpa
Senior Member
Joined: Jan 7, 2011 6:35:43 GMT -5
Posts: 2,425
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Post by mwcpa on Mar 12, 2014 4:36:03 GMT -5
a "706" (an "estate" tax return) is required when assets exceed certain thresholds (including that held in IRA, certain trusts, etc).
a "1041" (a fiduciary tax return) is used to report the income and expenses of a "trust" or "estate" (amongst others).
States also have potential filing requirements for both the "asset" and "income" side of an estate.
One should be sure to meet with a qualified attorney (T&E) and qualified tax advisor in this area... you need more than a tax preparer and any accountant.... this can be a complex area..... |
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Bonny
Junior Associate
Joined: Nov 17, 2013 10:54:37 GMT -5
Posts: 7,463 
Location: No Place Like Home!
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Post by Bonny on Mar 12, 2014 9:51:01 GMT -5
Crone,
As long as the Estate or Trust is receiving income its going to need to file tax returns until it's closed out and the final return is prepared. The estate is going to need to pay taxes on both the interest/investment income as well as the rent generated by her rented home since its still titled in her name.
FWIW when my mom died in early 2008, I had her old CPA prepare returns for 2008 and 2009 when I was able to finish selling/distributing all of the assets in her Trust.
Who did her 2011 taxes?
If I recall correctly, since her properties were titled (or supposed to be titled) in her Living Trust, I had to apply for a separate Trust ID number from the IRS. |
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rangerj
Junior Member
Joined: Jan 21, 2011 13:39:35 GMT -5
Posts: 242
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Post by rangerj on Mar 12, 2014 17:26:41 GMT -5
A trust tax return is required if the income is $600 or more. See a tax attorney who does estate tax work. There may be state and local tax considerations as well as federal estate tax considerations and the fair market value of the assets needs to be determined for purposes of the basis in the assets transferred from the estate. This all necessitates a professional.
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Bonny
Junior Associate
Joined: Nov 17, 2013 10:54:37 GMT -5
Posts: 7,463
Location: No Place Like Home!
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Post by Bonny on Mar 12, 2014 18:03:06 GMT -5
I'm also concerned after reading your post on the other thread that your brother may be making an expensive mistake in having your mother's house quitclaimed from the grandson to him. I've already noted on the other thread that I think you need the grandson to quitclaim back to the estate so the heirs get a stepped up basis.
Don't DIY this Crone. |
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