Illinois Inheritance Tax - Detailed Question


S

smith.andreson

* Grandfather died 1982, I lived in Texas in 1982
* Willed cash ($100K) to three grandchildren
* Other two brothers received monies immediately
* I, a minor, received 2 payments, 1 in 1995 ($41K) and 1 in 2000
($36K) from trustee (NationsBank, Later Bank of America)
* Resident of Illinois during those times
* Don't recall if I ever received a K9
* Don't recall if trustee paid taxes on Estate (probably did)
* I never claimed this money on my state or Federal income tax return.

Questions:

(1) Am I in deep trouble? Specifically, am I to expect that I owe
taxes (to the Feds and the State of Illinois) on the EARNED income that
this money generated while in trust (it was invested). I'll more than
likely owe penalties and interested, no doubt.

(2) Any idea what the rates were then -- if I had just up and paid the
monies for taxes on the earnings at that point?


Any advice is greatly appreciated.
 
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B

bbs

I can't provide you tax or legal advice, but I can list some general
thoughts. The trust created by your grandfather was probably an
irrevocable trust (as being deceased, it would be difficult to revoke
or amend it). Generally irrevocable trusts pay the income tax on any
income (on form 1041). The trustee, as fiduciary, has the
responsibility for seeing to it that the taxes were paid. Last, Bank
of America is TERRIBLE. It is unfortunate that folks allow companies
like that to continue to exist...


Gary Brolis
http://www.MechanicsofMoney.com
http://www.MechanicsofMoney.com/blog.php
 

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