Dispersing Funds Between Siblings from Estate Sale

[buzibee]

What is the name of your state? Virginia

My husband and his siblings were left their family home by their mom when she died. Everyone gave the executor signed permission to deal with a buyer. The buyer wrote the check in the name of the sister who is acting as the executor.

So becomes;

1.) Since the check was written to her will she be taxed as if it's her income? She wants to put the check into the bank account that she has setup as "The Estate of...". But she's not sure since it's written to her.

2.) How does she disperse the money (since the check is written to her) and not get taxed for all of it?

3.) If she pays taxes on the money "before dispersing it" to the siblings will be taxed on the money portion they get?

We've been trying to get answers from our tax preparer but so far they haven't contacted us back.

Any point in the right direction would be appreciated.

Signed,
buzibee

 

[buzibee]

bumping up message.

please any suggestions...

 

[mtpockets]

Sale of property owned by decedent's estate

The Estate is the taxpayer. The Executor is responsible for filing tax returns and making sure taxes are paid.

The gain or loss on the sale of the decedent's home is the difference between the net sales proceeds (gross sales proceeds minus selling expenses) and the basis. The basis is the fair market value at the date of the decedent's death.

There should be no income to tax. If the home was sold shortly after your mother's death, then the sales price is the best indication of the fair market value (unless you had an appraisal).