inheritance tax

[cheryl727]

What is the name of your state? florida

as personal representive of an estate, (which has been closed) and sole beneficiary, i received funds from a settlement this year. I know that no taxes are due to the state of florida, but am concerned if i will owe federal taxes

 

[dallas702]

Were you paid for the services of administering the estate? If so, go to www.irs.gov and do a search for the answer.

As the beneficiary of the estate you are taxed only if the estate value is higher than the exempted amount. The current exemption is on the same website.

 

[cheryl727]

no i was not paid for administrating the estate, only received the balance after the attorney's and all other expenses were paid, I received less than 70,000. I have been to the irs site many times, and have found nothing that relates specifically to this kind of case. I have read that the personal representative is responsible to send 1099's to the beneficiary's for the full amount of the settlement, not the net received. do i sent myself a 1099?
is this even reportable to the irs? i am totally confused. thanks for your help.

 

[dallas702]

If you were the beneficiary of the estate, and it was only $70,000 there are no fed taxes for you to pay. In fact, you should be able to deduct all the attorney's and other fees when you file. Didn't the attorney advise you as to what your tax responsibilites would be? How much did the attorney get for his services? Was this probated?

See if this helps:

http://www.irs.gov/businesses/small/article/0,,id=108143,00.html

 

[abezon]

Let's back up a minute here. What the heck was the settlement for? A lawsuit by the decedent or the estate? Or was this just the money left over after paying the estate's expenses?

 

[cheryl727]

yes it was probated and closed earlier this year. there were two different law firms involved, probate and trail attorneys. i have papers from the probate attorney stating no taxes are due to the state of fl. the settlement was for 150 and like i said i received less than 70. it's amazing the charges they can come up with in addition to their commission. needless to say, i was not pleased with the trial attorney, and this was settled thru arbitration.
this was a wrongful death suit, no he didn't inform me about anything other than wanting to settle the case, we didn't part on very good terms.

 

[dallas702]

I'm thinking that the proceeds of a wrongful death suit are not part of the estate, but a separate issue for which you would not be liable for federal taxes. It's much the same as any P.I. settlement. If there were proceeds from a lawsuit, what was the value of the actual estate....or was the suit awarded to the estate rather than to you?

 

[cheryl727]

The suit was brought by me as plantiff, personal representative of the estate, deceased, sole heir-at law. The form filed with court states federal tax return is not required to be filed for the estate, and that the estate does not owe FL state tax. My question is since the estate owes no taxes, am I personally responsible for the taxes.

Thanks for your help.

 

[Snipes5]

There is no tax on inheritance to the recipient. If it was not taxed at the estate level, it isn't taxable to you UNLESS it would have been taxable to the deceased.

From what you've said, it appears you can take your money and go on your merry way, no tax required.

Snipes

 

[cheryl727]

thanks snipes for your reply, but this situation has not been a very merry one.