Return of A Deceased Taxpayer

[Uncle Sam]

I have a client who passed away in 2010. A 94 year old widower.
His son is now my contact- who I've dealt with previously in relation to this tax return.
The mother passed away 2 years ago.

The return has a negative AGI, -0- tax liability, -0- money paid in. The reason for filing the return is, there were Schedule D trades (with gross proceeds) generating more than a $ 3,000 loss - ONE OF WHICH was traded by the son before year end AFTER DEATH to clean out the account. So I had to report it to agree with 1099-B gross proceeds.

But my question is - can I accept the son's signature on the 8879 as a POA as I know for a fact that he's had POA powers before for both mother and father? If I need a death certificate for my file, I can get it. No need for Form 1310 as there's no refund.

No estate or trust succession - brokerage account was the only asset remaining.

[JohnH]

Doesn't a POA expire at death?

[S T]

Hmm

Who is the executor or personal representative of the estate, even if no probate?

Sandy

[erchess]

Excuse my ignorance

but of what use or significance is the death certificate other than proving the man is dead? Even if son is his only surviving close relative he could have left a will providing that someone else was to be his personal representative. I have no idea what kind of evidence you would need but I expect you need something in writing. I would think that at the very least you ought to prepare a statement and get him to sign if I'm hearing right and there is not going to be a court process. It would obviously be ideal if you had a judge sign off on him as P/R but a piece of paper for your files by itself is not reason for going to court.

[New York Enrolled Agent]

The return has a negative AGI, -0- tax liability, -0- money paid in. The reason for filing the return is, there were Schedule D trades (with gross proceeds) generating more than a $ 3,000 loss -

Gross income not gross proceeds determines if a tax return needs to be filed. If I understand the post correctly then there was insufficient gross income to require the filing of a return. If no return is filed, you have no worries about signatures, POAs, executors, etc.

Simply tell the son that the IRS may issue a CP 2000 in the future and the son (at that time) can return the documentation showing the capital losses and the lack of gross income to trigger the filing requirement.

[Uncle Sam]

Deceased Taxpayer

I would feel more at ease knowing that the IRS has offset information to show no taxable gain from the gross proceeds.

The son isn't healthy himself - been on disability for about 10 years.

The only other relative is another son that doesn't live in the area who I've never even spoken to - and we are complete strangers.

I'm just looking to file a "final return" - noting date of death- even though it's not necessary to file - because I'd rather not have to deal with this son anymore.

[S T]

See Pub 559

Maybe this will help you
From Pub 559 - here is a link http://www.irs.gov/publications/p559...blink100099487

Signature. If a personal representative has been appointed, that person must sign the return. If it is a joint return, the surviving spouse must also sign it. If no personal representative has been appointed, the surviving spouse (on a joint return) signs the return and writes in the signature area “Filing as surviving spouse.” If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative.”

Sandy

[oceanlovin'ea]

Your heading made me laugh this morning when I read it..sounded like a mystery novel....
"The Return of the Deceased Taxpayer" Where did he return from?

Ok, ok.....guess I'm a little punchy this morning. Dealing with the remains of the smell of a possum that died under our house yesterday. It was disgusting!!!!! My poor husband had to crawl under the house to find it and then get it into a garbage bag and crawl back out.
I should buy him a steak dinner for that.

On the issue at hand, I agree with Sandy's post.

Linda, EA

[Davc]

I believe the gross income filing requirement is based on income including capital gains but excluding losses. No netting.

[Gretel]

I think the original poster also stated that some of the stocks were sold by son. If so, this income/loss belongs to son with inherited basis. Since sold soon after death all of this is probably a mute point, since it won't change son's tax liability.

As far as signature goes, I also concur with Sandy.

[taxea]

if the return zeroed out and the son has a poa he can use it to sign the return.

If you have a trustee/personal rep for an estate that doesn't zero and have no poa, then there is another form that notifies the IRS of your status. Can't remember the number but IRS asks that this form be filed separate and give enough time for it to be input into their computer before the return is filed. Then relative can sign his/her name "for deceased"

[oceanlovin'ea]

POA are not valid after a person dies. They can only be used to sign for a living person.

Linda EA

[Uncle Sam]

Deceased Taxpayer's Return

Now - isn't that a more appropriate title?

Thanks to all who posted to give me insight.

That's the benefit of this board.

[Burke]

POA are not valid after a person dies. They can only be used to sign for a living person. Linda EA

You are correct. It is amazing how many people think they can continue to use it.

[Koss]

Observation

The original post says:

The return has a negative AGI, -0- tax liability, -0- money paid in. The reason for filing the return is, there were Schedule D trades (with gross proceeds) generating more than a $ 3,000 loss - ONE OF WHICH was traded by the son before year end AFTER DEATH to clean out the account. So I had to report it to agree with 1099-B gross proceeds.

If the son "cleaned out the account," then he must have something in writing that convinced a financial institution that he is the sole surviving heir, executor, or administrator.

Yes... I realize that the brokerage account was probably online, and that if the son had the login credentials, he could have just gone in after the death and sold off the securities. But how did he "clean out the account?"

He either had to transfer funds electronically from the brokerage account to checking account in the name of the decedent, or he had to request that the broker issue a paper check. Either way, in order to get his hands on the money, there must have been a local bank involved, and he must have had something to show them, to indicate that he had the authority to either draw money from his father's account, or negotiate a paper check from the broker...

Hmmm???



Okay, wait a minute...

Maybe the brokerage account was "payable on death," or joint ownership of some sort. That would have allowed him to take title to the assets in the account, but it does not necessarily give him the authority to sign a tax return.

Never mind.



BMK