by client and brother. mom died december 2008 and he received a document from insurance company asking if he wants them to fill out form 712. he and brother were listed as beneficiaries on the policy (each got $15,000) and they want to give sister some so they get equal amount. client is asking if he and brother will be paying on this when they do their return next year. should i be telling him to go to a lawyer or cpa regarding the form 712?
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Is he the executor of the estate?
Q: What is the IRS Form 712 and when is it needed?
A: The IRS Form 712 is a statement that provides Life Insurance Policy values as of the date of an insured’s or policy owner's death, or at a time a Life Insurance Policy is transferred as a gift. The IRS requires that this statement be included when an estate (or gift) tax return is filed. (from John Hancock website about Form 712)
Is there an estate tax return being prepared? I don't see why there would be a need for Form 712 unless there was an estate return."A man that holds a cat by the tail learns something he can learn no other way." - Mark Twain -
i don't think there will be a fed return for estate. mom had two insurance policies, 30,000 each and a house that had market value of $60,000,Comment
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Taxmandan is correct. Form 712 is only needed when an Estate Tax return, Form 706, is filed. The insurance company completes the Form 712 and gives it to the estate fiduciary if it is required. In that case, insurance proceeds are reported on the Estate Tax return.
As far as the beneficiaries are concerned, death benefits from an insurance policy are not taxable and are not reported on their income tax returns. They may, however, receive a 1099INT from the insurance company, because the company will pay interest on the benefit from the date of death until the date payment is made. That amount will go on the bene's tax return in the year the payment is made.Comment
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