Executor Fees

[GTS1101]

Hi,

I have a client whose father died in 2008 The mother died in 2007. They have moved into their parents house and lived their for the last six months as they are working on fixing up the home getting it ready for sale. Because they had to work on their dad's house they decided to put their own personal residence up for rent and they moved all their items into storage. The parent's house has a reverse mortgage and they took some money from it to use to fix up the house. Also they are taking about $700 monthly to reimburse themselves for the storage fees and the prop mgmt fees for their rental property because they had to move in to fix up their parent's home to get ready for sale. Does the IRS consider this $700 monthly to be executor fees that my client has to report on their 1040 or is this non-taxable income to my clients?

Thank You!

GTS1101

[John of PA]

Not executor fee

If your client is inheriting the estate residue anyway, it is thier money anyway, so they can just take it in for form of inheritance (non taxable). They do not have to take an executor fee.

[BOB W]

If your client is inheriting the estate residue anyway, it is thier money anyway, so they can just take it in for form of inheritance (non taxable). They do not have to take an executor fee.

Taking it as an inheritence can be a problem if he is not the only heir. Following the will may spread his fee among the other beneficiaries.

[John of PA]

yes understood

Yes, understood, I assumed he was the only heir.

[taxea]

I'm confused...does the bank know that the parents died? Do they still issue reverse mortgage checks after death? Does the client realize he will have to refi the house in order to keep it? taxea