Estate wants to make improvement on Residential rental inherited..

[AZ-Tax]

Estate wants to make improvement on residential rental house that was already Warranty Deeded to the 5 heirs back in 2004. DOD in late 2014 and Estate is not yet closed. Rental house will not be sold and is owned by all 5 heirs. Improvement is a carpet and they want to know if Estate funds can pay for carpet. First thing that comes to mind is I don't believe I ever did an Estate return with a Depr report.

[FredcpaAZ]

estae

from what you posted, the house given as a gift to the five back in 2004 and therefore is not an estate asset, so how can the estate pay for work on assets it does not own?
they are just looking for someone to pay the bill,

[taxea]

tell them to split the expense 5 ways they own the property...Fred is spot-on

[Gretel]

from what you posted, the house given as a gift to the five back in 2004 and therefore is not an estate asset, so how can the estate pay for work on assets it does not own?
they are just looking for someone to pay the bill,

I am not sure we have all the facts to determine that this was a completed gift or if, maybe, there was a life estate. This is also important for basis if and when place gets sold.

[AZ-Tax]

Can Farmhouse be in Estate and also not in Estate at same time?

According to a couple Estate Attorney's I spoke to, this message board and NSA message board, the majority felt the 2004 Warranty Deed & Will, transferred property upon donor's death. I even read the states stature and it says pretty much the same thing. What is strange about this is the Attorney for the Estate also stated the Farm and rental Farmhouse is transferred upon death YET that same Attorney told the 5 heirs to use the Estate account to pay for the Farm house new carpet. Also, the farm and farm house rent that was due shortly after the donor's death, was paid to each individual heir and not the Estate. My research found that Carpet does qualify for sect 179 for it has a 5 yr life but again the Estate does not own the rental according to the County Assessor OR does it.

[DonB]

I believe this in not an estate asset. If the estate wants to distribute $ to the heirs, that is fine. They can then use the $ to buy a carpet for their co-owned rental.

[Burke]

No, the Estate does not own the rental. The 5 heirs do, and whatever they want to do to it, maintenance, repair or improvement, etc is at their expense. Even if it was a life estate situation, it went to them fully without restriction at the deceased's death. What the estate CAN do, is make an early equal distribution to each of them now, as long as there is enough money left to pay all the necessary debts, taxes, administrative expenses of the estate. The executor assumes all liability if he does this and there is not enough money to take care of the other necessary things. However, if a distribution is made, then they have the funds to do what they want to with them.

[taxea]

the atty obviously is not a tax knowledgeable pro