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final estate tax form 1041 and 1099c

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tcrackly

Junior Member
I was the co-administrator for my sister's estate in MA. She rented an apartment for years an d had only Social Security income and a little from craft sales. I filed her 1041 in 2006 and later settled an outstanding $6100 credit account with the $3000 remainder of her bank holdings. Now I am informed that I will receive a 1099c form for the settled debt. How can taxes be paid on an estate that's closed? Will I be held liable for this debt with my personal monies?
 


tcrackly

Junior Member
I was the direct beneficiary of the life insurance which I used for funeral expenses and some other estate credit debts. I was told by legal counsel that as direct beneficiary those funds are not liable to the estate debts, with the exception of final medical and funerary expenses.
 

anteater

Senior Member
Seems odd that life insurance proceeds would have to be used for final medical and funeral expenses unless you signed to be responsible for them. But that may be the law in MA.

Also seems odd that such a seemingly small estate would even have to file a 1041. Do you mean your sister's final 1040?

**************.and later settled an outstanding $6100 credit account with the $3000 remainder of her bank holdings. Now I am informed that I will receive a 1099c form for the settled debt. How can taxes be paid on an estate that's closed? Will I be held liable for this debt with my personal monies?
I thnk that you need to amplify a few things:

1) What does "later settled" mean? As part of the probate process?
2) Who is doing the informing? And whoever they is, are they saying that you personally will be receiving the 1099-C?

I don't see how you could be personally responsible. But maybe tranquility will see this one and add a better answer.
 

tcrackly

Junior Member
Maybe it was a 1040 form. It was the tax resolution for her last year alive, 2005, when she received SS. It took me several months to get an EIN no. from the IRS. Her limited bank accounts were entered into the tax form and taxes were figured on the interest in mid 2006. The subsequent refund was added to the estate bank balance and together with some proceeds for selling household goods were used to take care of her debts, medical, utilities, memberships, etc. The 1099c is from a collections firm for a major bank credit card that harassed me via telemarketer for months. Their payment was settled for $3000.00 on a $6100.00 in 2006, after the taxes were filed and I had a definitive balance for the estate. I haven't received the form 1099c yet, maybe they won't even send it. When I inquired about the untimeliness of the letter, they apologized and said it was just procedure, not to worry.
 
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tcrackly

Junior Member
No 1099c

Apparently the Bank thought differently in hindsight and decided not to send a 1099c. Instead they send a conventional credit card statement listing the settlement amount as the final balance, now paid in full.

Therese
 

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