final tax form

[momm2500]

What is the name of your state (only U.S. law)? PA

had a child pass away and was receiving social security disability at the time. to my understanding you do not need to claim that as income. child did own some stock and it was cashed out before passing away. do we need to claim that or not. we used it to pay for the funeral and the cemetary and the marker stone and the luncheon after the funeral. i think we ended up with $2000 after all said and done.

 

[HappyWanderer]

I'm sorry for your loss.

How much income did the child have in the year of death? How old was he? Was he your dependent?

 

[momm2500]

child was 25 and dependent of hubby and me. child was handicapped and disabled and we provided more than 50% of support and so forth. child was on ssdi and only received less than $8000 from ssdi. no other income for child for the year of 2009.

 

[HappyWanderer]

What about the capital gain from the stock sale?

 

[momm2500]

well that is what i need to know. who claims it? the deceased child on a separate form as the final bill or final tax form or do we do as parents? the money was used to pay for funeral expenses. and is it really considered a capital gain (because of the most recent problems last year in the stock market?)

 

[HappyWanderer]

It does not matter what the money was used for. And, we don't know the capital gain based on market principles, but on amount realized minus basis. Since he sold it (he was alive), it is on his return.

It is highly likely the IRS will be looking for a return. If you need to make one or not is unclear. Whether a tax due is unclear. They may have the right to go after anything which was in his estate if taxes weren't paid. How much was realized in the sale?

 

[LdiJ]

It does not matter what the money was used for. And, we don't know the capital gain based on market principles, but on amount realized minus basis. Since he sold it (he was alive), it is on his return.

It is highly likely the IRS will be looking for a return. If you need to make one or not is unclear. Whether a tax due is unclear. They may have the right to go after anything which was in his estate if taxes weren't paid. How much was realized in the sale?

I think that is going to confuse her.

If a return needs to be filed it needs to be filed for your son.

The actual taxable gain (or loss) is the difference between what the stock was originally purchased for, plus any reinvested dividends, vs the amount the stock was sold for.

If the original stock was purchased for 8000.00 and sold for 11000.00, that is a 3000.00 capital gain. If it was purchased for 12000.00 and sold for 11000.00 that is a 1000.00 capital loss.

 

[momm2500]

why wouldn't the irs be looking for a return? if the companies are sending 1099-div to the IRS, i would think that they would look for a return to match with the social security number on record.

 

[LdiJ]

why wouldn't the irs be looking for a return? if the companies are sending 1099-div to the IRS, i would think that they would look for a return to match with the social security number on record.

The IRS might not be looking for a return if the amount in question was less than his standard deduction.