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Estate Settlement Question
Posted on 4/8/13 at 7:48 pm
Posted on 4/8/13 at 7:48 pm
Dear MT,
My grandparents estate settled last year, and I received some compensation from the estate this calendar year.
I got a text from my mom saying that I had to amend my taxes to account for the compensation I received. I know this will not affect my taxes, or at least my understanding, because I received the money this year. She says that, according to her CPA, I have to amend it for estate bookkeeping.
My expertise isn't taxes, and it certainly isn't estate bookkeeping/taxes. My question, do I need to amend my taxes to account for this? I was planning on including it in my next year taxes. It just seems like the bookkeeping is internal and doesn't necessarily need to be reported to the federal government...
Thanks
My grandparents estate settled last year, and I received some compensation from the estate this calendar year.
I got a text from my mom saying that I had to amend my taxes to account for the compensation I received. I know this will not affect my taxes, or at least my understanding, because I received the money this year. She says that, according to her CPA, I have to amend it for estate bookkeeping.
My expertise isn't taxes, and it certainly isn't estate bookkeeping/taxes. My question, do I need to amend my taxes to account for this? I was planning on including it in my next year taxes. It just seems like the bookkeeping is internal and doesn't necessarily need to be reported to the federal government...
Thanks
2
Posted on 4/8/13 at 9:28 pm to Tmacelroy12
Talk to an accounting...estate tax accounting is more similar to trust accounting than individual accounting.
Did you receive a bequest or compensation? If it is a bequest you shouldn't have to report anything. If it is compensation you will likely have to report it in 2013 since you are a cash based taxpayer.
Still...get an accountant to do it.
Did you receive a bequest or compensation? If it is a bequest you shouldn't have to report anything. If it is compensation you will likely have to report it in 2013 since you are a cash based taxpayer.
Still...get an accountant to do it.
Posted on 4/8/13 at 10:25 pm to ShreveportTIGER318
It depends what you received. I do not think you will have to amend anything unless you have sold the the inherited assets. Can you be more specific?
Posted on 4/8/13 at 10:47 pm to Janky
quote:
Can you be more specific?
Sure.
I'm not exactly how the estate was broken up, but I received cash from the settlement. I didn't sell any assets per se. I used the cash to supplement a down payment for a new car.
Again, I don't know much about taxes, especially on estates, and if I need to get even more specific, I'll ask for more. But this is really all I know as of now.
Posted on 4/9/13 at 5:42 am to Tmacelroy12
You should be fine. Cash is cash so no taxes due there. Other assets received a step up in basis at death. The only way taxes will be due is if the assets spit off income either interest or dividends or you sold them at a gain over date of death value. Either way, if you owed taxes you would have received a 1099.
Posted on 4/9/13 at 7:44 am to Tmacelroy12
In what capacity were you compensated? If you were compensated through a business entity that uses the accrual mnethod of accounting, then you could have a problem. You should have recognized the revenue in the year the compensation was earned. If you use strictly cash method accounting, then you recognize the compensation in the year it is received (or constructively received if applicable).
Most likely, you are correct, and you should report the compensation in the year it is paid to you. It sounds like your mother hired a CPA who is in over his head. The estate should have issued you a Form 1099-Misc for any non-employee compensation it paid you (assuming it was over $600).
Most likely, you are correct, and you should report the compensation in the year it is paid to you. It sounds like your mother hired a CPA who is in over his head. The estate should have issued you a Form 1099-Misc for any non-employee compensation it paid you (assuming it was over $600).
Posted on 4/9/13 at 9:09 am to Poodlebrain
quote:
Poodlebrain
Yeah, what that guy said.
Posted on 4/9/13 at 10:56 am to Janky
Thanks everyone, helps a lot. Again, I don't think it was split from investments, but I'm not 100% sure on this. I wasn't involved in any of the estate handling, so I don't know for sure. Again, thanks for the information.
Posted on 4/9/13 at 11:09 am to Tmacelroy12
If you don't get a 1099, then don't report it.
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