USA JADE 11-30-15

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mom passed dec. 2014 and I'm named executor. She only had a house with current fmv of $20,000, less than $1,700 in checking account, and $1,400 in common shares of prudential ins. company. I need to file 1041 and will file before the March 15, 2015 fiscal year deadline. I want to be able to reduce the gross income to less than the $600 for tax purposes. I have not paid out any proceeds to beneficiaries, but have paid some estate expenses, (ex. funeral expenses) from my own funds.

questions:
1) can I reimburse myself for bills I paid for the estate from my personal funds?

2) will called for sale of house and proceeds to be paid to 3 beneficiaries. House only sold for $20,000 so is this considered as part of the gross income for estate INCOME tax reporting, or not? If so, if I pay out those funds, can they be deducted to lower the taxable estate?

3) common shares in prudential were liquidated and funds put in estate checking account. are these funds considered as part of gross income? if so , if I pay them out to beneficiaries can they be deductible to lower gross income?

Thank you,
Jade
 
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Hi Jade,
Sorry for your loss.
Income and assets are two different things. What you need to know is the basis of the house and the basis of the stock. If the assets were inherited, then the basis becomes the value of the asset on date of death. If your Mom gifted the assets prior to death, then the basis is what you Mom paid for the asset plus improvements. The income is calculated as the difference between the basis and what the assets are sold for (gain or loss). Cash in bank is not income.
You should seek the advice of a professional if you have concerns about the filing requirements.
 
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