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Filing Income Taxes for an Estate

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skj2690

New member
I'm from NC. My mother passed away in August 2018, I am her daughter and became the executor of her estate. She has not filed income taxes since 2015. I met with a CPA who was going to charge a $1000 per year to file her taxes and from his view of things it looked like she would have to pay in. Her estate account is $2,900. She has a piece of property appraised at $27,000. I want to find a CPA or tax company that can file her taxes right instead of me trying to figure out everything on my own and possibly messing up something. I was wondering, if I spend the majority of the money in her estate account paying for someone to file her taxes and it comes time for me to actually pay her taxes, will the IRS expect the executor to sell the land to pay for deceased taxes or will they view the inventory and her estate bank account and see that there is no money there or take what is there and waive the rest?
 


Taxing Matters

Overtaxed Member
The estate owes the taxes that your mother failed to pay. So if your mother owes taxes and the estate has the assets to pay it, then you as the executor need to ensure that is done. If that means selling the real estate, then that's what you'd have to do. Failure to take care of that can make you personally liable to the IRS for the taxes not paid. I would check with some other tax preparers for what they will charge to do her returns. Unless she has an unusually complex situation $1,000 per return is a lot.

Note, though, that reasonable administrative fees, including the cost of preparing the returns and your fee as executor, are allowed to come out of the estate prior to paying the income tax that she owes. But all her debts have to be paid, taxes included, before any beneficiaries get anything from her estate.
 

LdiJ

Senior Member
I'm from NC. My mother passed away in August 2018, I am her daughter and became the executor of her estate. She has not filed income taxes since 2015. I met with a CPA who was going to charge a $1000 per year to file her taxes and from his view of things it looked like she would have to pay in. Her estate account is $2,900. She has a piece of property appraised at $27,000. I want to find a CPA or tax company that can file her taxes right instead of me trying to figure out everything on my own and possibly messing up something. I was wondering, if I spend the majority of the money in her estate account paying for someone to file her taxes and it comes time for me to actually pay her taxes, will the IRS expect the executor to sell the land to pay for deceased taxes or will they view the inventory and her estate bank account and see that there is no money there or take what is there and waive the rest?
$1000.00 per year is quite high to file personal returns unless your mother has some extra complicated stuff going on. Look for a local tax office that is open year round. They will have experienced people who would likely be able to do the returns for you for considerably less money than that.

However, if there is not enough cash in the estate to cover both the cost of tax preparation and the taxes, yes, you would be expected to sell the property to cover the rest of her tax debt. If you do not, you could personally be held liable for the tax debt, because as the executor, you would have breached your fiduciary duty.

Was your mother self employed or anything like that?
 
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