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Old 11-19-2015, 05:37 PM
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estate taxes

My question is with respect to estate taxes which I have been named administrator for. My father passed away 3 years ago and had no taxable income or other assets that I was aware of at that time. Approx. two and a half years later I was informed by my Uncle that he was looking to sell a piece of property that he and my now deceased father were given power of attorney over by my Grandmother. The property was to be sold with my father's siblings equally sharing the proceeds of my father's half of the property transaction. My father resided in New York when he passed and the property he was 50% owner of was in Pennsylvania. I reside in New Jersey and was asked to be the administrator by my other siblings. The property sold for $50,000 and after attorney fees to set up the estate to sell the property, real estate transaction fees and other fees, the total amount my father's estate received was $18,488.00. I am at a total loss with how to disperse the funds to the rest of my family without knowing what the tax implications are. Are there any deductions that can be made and what percentage of taxes need to be paid before I distribute any funds to my brothers and sister. I would greatly appreciate any help in this situation.

Shawn



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Old 11-20-2015, 05:48 AM
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Quote:
Originally Posted by shawn8955 View Post



#1;My question is with respect to estate taxes which I have been named administrator for. My father passed away 3 years ago and had no taxable income or other assets that I was aware of at that time. Approx. two and a half years later I was informed by my Uncle that he was looking to sell a piece of property that he and my now deceased father were given power of attorney over by my Grandmother. The property was to be sold with my father's siblings equally sharing the proceeds of my father's half of the property transaction. My father resided in New York when he passed and the property he was 50% owner of was in Pennsylvania. I reside in New Jersey and was asked to be the administrator by my other siblings. The property sold for $50,000 and after attorney fees to set up the estate to sell the property, real estate transaction fees and other fees, the total amount my father's estate received was $18,488.00. I am at a total loss with how to disperse the funds to the rest of my family without knowing what the tax implications are.








#2;Are there any deductions that can be made and what percentage of taxes need to be paid before I distribute any funds to my brothers and sister. I would greatly appreciate any help in this situation.

Shawn


#1;You do n ot file form 706, state estate taxes or state inheritance taxes. For 2015, the estate tax only applies to estate of over $5.43 M;however, you must file Form 1041, an income tax return for estates ,for the estate that since the estate has gross income for the tax year of $600 or more. Form 1041 must be filed for the person who died in addition to any personal income tax return you need to file on his behalf. After his death, everything that person owned/ income received becomes part of his estate.On form 1041, you can
Reduce estate taxable income by claiming executor’s fees, if the estate pays you for your services. You report the amount you receive on your tax return; professional fees, including amounts you pay to attorneys, accountants, and tax preparers; administrative expenses, such as court filing fees; miscellaneous deductions to the extent they exceed two percent of the estate’s agi. Miscellaneous deductions for an estate include investment advice, safe deposit box rentals, office supplies, postage, and travel expenses.

#2; As mentioned above.



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Old 11-20-2015, 06:51 AM
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the beneficiaries of the estate that must distribute all its income currently, they must report your shares of the distributable net income whether or not they have actually received it.
Even if you are the beneficiary of the estate that does not have to distribute all its income currently, you must report all income that must be distributed to you (whether or not actually distributed) plus all other amounts paid, credited, or required to be distributed to you, up to your share of distributable net income on your 1040. there must be a specific requirement for current distribution either under local law or the terms of the decedent's will. If there is no such requirement, the income is reportable only when distributed.
As the estate has more than one beneficiary, the separate shares under Distributions Deduction rule may have to be used to determine the distributable net income allocable to each beneficiary. Beneficiaries who are entitled to receive currently distributable income generally must include in gross income the entire amount due them. However, if the currently distributable income is more than the estate's distributable net income figured without deducting charitable contributions, each beneficiary must include in gross income a ratable part of the distributable net income.



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