Probating Will- sending out money

[Flat Tire]

I am probating my mothers will and there is only one item that will be sold and divided. Her home will be sold and the proceeds will be set to her five children. What form do I use to send the IRS to show where that money went? And what info do I need from each recipient so I don't get stuck with all the taxes on this ? Thanks

 

[LdiJ]

I am probating my mothers will and there is only one item that will be sold and divided. Her home will be sold and the proceeds will be set to her five children. What form do I use to send the IRS to show where that money went? And what info do I need from each recipient so I don't get stuck with all the taxes on this ? Thanks

There are no forms that need to be sent out. Its also highly unlikely that there will be any federal taxes due on the sale of the house. You all received a stepped up basis to fair market value upon inheriting the house. Therefore due to the expenses of selling the home, its almost guaranteed that you will either have a small capital loss or just break even.

 

[davew128]

Just to expand on this. I always advise families of decedents who owned real estate to file an estate income tax return, regardless of whether the estate had income or not. The cost of administering the estate and the aforementioned capital loss on the sale of the real estate can be helpful to the beneficiaries of the estate. Of course to get the loss the 1041 has to be filed as a final once the estate is dissolved.

 

[Flat Tire]

The title company is writing a check to the "Estate of My Mother" and in order for me to set up a checking account to process that check the bank made me set up an EIN number with the IRS. So when I deposit that check my SSN will show the money from the sale of that home went into my name. I will then send out checks to the rest of the family according to her will, don't I have to notify the IRS as to where that money went ?

 

[Ohiogal]

The title company is writing a check to the "Estate of My Mother" and in order for me to set up a checking account to process that check the bank made me set up an EIN number with the IRS. So when I deposit that check my SSN will show the money from the sale of that home went into my name. I will then send out checks to the rest of the family according to her will, don't I have to notify the IRS as to where that money went ?

Have you opened a case in probate court.

 

[LdiJ]

The title company is writing a check to the "Estate of My Mother" and in order for me to set up a checking account to process that check the bank made me set up an EIN number with the IRS. So when I deposit that check my SSN will show the money from the sale of that home went into my name. I will then send out checks to the rest of the family according to her will, don't I have to notify the IRS as to where that money went ?

It WILL NOT show up under your name or SSN. It will show up under the EIN number of the estate. The proceeds of the sale of real estate are NOT income. There may be a capital gain or a capital loss, but the proceeds themselves are not income. I have already told you that its very unlikely that there would be a capital gain.

 

[Flat Tire]

It WILL NOT show up under your name or SSN. It will show up under the EIN number of the estate. The proceeds of the sale of real estate are NOT income. There may be a capital gain or a capital loss, but the proceeds themselves are not income. I have already told you that its very unlikely that there would be a capital gain.

The "EIN number of the estate" is the executors SSN #...... that my SSN because I am the executor of the will. I have a sense you don't understand.

 

[Flat Tire]

Have you opened a case in probate court.

Yeah, I am done with the court. I can sign off on the property with the title company.

 

[Zigner]

The "EIN number of the estate" is the executors SSN #...... that my SSN because I am the executor of the will. I have a sense you don't understand.

Are you saying that, when you applied for an EIN with the IRS, the number they issued was YOUR SSN? Really?

 

[LdiJ]

The "EIN number of the estate" is the executors SSN #...... that my SSN because I am the executor of the will. I have a sense you don't understand.

You said that you went to the IRS and got an EIN number for the estate (which is what you are supposed to do). Are you now saying that you did NOT get an EIN number for the estate? I know exactly how its supposed to work, but I am now confused on what you have actually done.

Do you somehow think that the EIN number is the same as your social? Because its absolutely not supposed to be the same as your SSN. The estate is a separate legal entity from you. Your social should not be associated with it at all.

 

[Flat Tire]

Are you saying that, when you applied for an EIN with the IRS, the number they issued was YOUR SSN? Really?

When someone applies for an EIN number as an Executor of a Will they assign you an EIN # based on the executors SSN. So when the IRS looks up that EIN number they find my SSN attached to that EIN number.

 

[anteater]

Yeah, I am done with the court. I can sign off on the property with the title company.

What state are you in?

Normally, when one says "I am done with the court" in a probate matter, that means that all debts have been paid, all the remaining assets have been distributed to the beneficiaries/heirs, and the court has released the executor from his/her duties.

 

[tranquility]

When someone applies for an EIN number as an Executor of a Will they assign you an EIN # based on the executors SSN. So when the IRS looks up that EIN number they find my SSN.

As a responsible party they will communicate with. The EIN signifies a completely different entity. The IRS is not going to look to you unless the EIN is not used to file a fiduciary return.

 

[Zigner]

When someone applies for an EIN number as an Executor of a Will they assign you an EIN # based on the executors SSN. So when the IRS looks up that EIN number they find my SSN.

You really do not understand how it works.

The EIN of the estate is NOT your SSN. The estate is its own legal entity.

 

[davew128]

I have a sense you don't understand.

Of the people posting on this thread, one doesn't understand how this is supposed to work, and the rest of us are trying to educate you.