Deceased died w/o will, no beneficiary to his IRA & NQ brokerage account was in deceased name only. Informal probate and parent ended up bene. According to the Bank (IRA) and Brokerage acct, the IRA and the stocks were never placed in Estate account w/Estate EIN and neither was liquidated. Both have been already placed in Bene's name. I am assuming neither belong in the Estate, correct?
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If the amounts of the assets were below the minimum for probate filing in the state of residence, it apparently didn't need to go through that process. If parent qualified as Personal Representative, then they should have a court document to that effect, which I take it was sent to the custodian of the funds. If the IRA and brokerage have already been placed in the parent's name, then there is nothing else to do. And no return to file, which would just be an in-and-out anyway to the parent. Hopefully, there are no other potential heirs to protest the distribution. -
Yes on court appt PR document and....
No other potential heirs. Now the estate earned some interest from the DOD to the close of the Estate. That I understand can be subject to Estate income tax but how does an IRA and a NQ brokerage account work? The deceased never sold the stock purchased in the NQ account prior to death and the heir's cost basis will be FMV at DOD, correct? In that case the heir will pay cap gain(s) if applicable upon sale of the stock, correct? The IRA has got me a little confused but I am guessing the Heir's cost basis is $0 since all of the IRA contributions were made tax deductible. Heir never liquidated the IRA.Originally posted by Burke View Post
This is the Estate for which the deceased left a residence house that sold during the Estate period. The sale of the house will be included in 1041 tax return.Comment
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You would include the interest earned and the sale of the house, if the proceeds were paid to the Estate. But the stock account and IRA were never sold/liquidated so there should be no income. The stocks are counted as a distribution. Yes, the basis is FMV at DOD for the stock account. And the IRA is fully taxable (but no penalty) when withdrawals are made, as it was an inherited, traditional IRA apparently, and has zero basis.Originally posted by AZ-Tax View PostComment
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Wait a second, if residence & IRA & investments were in estate I cannot image that probate was not needed. Maybe in your State the limits are much higher than in mine. My recent case showed me that banks do almost anything to transfer assets as fast as they can. My deceased client's assets, that were not placed in the living trust, are just under $500,000. Bank wanted to transfer accounts just because the living trust doc said who the bene's are (children). Children finally went to lawyer to initiate the probate process.Originally posted by AZ-Tax View Post
I actually wonder how all of this actually makes a difference if it is certain, that inheritance cannot be contested. Of course, that you never know.Comment
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Yes, states are really different in this process as far as probate goes. One poster recently said their state minimum was $100,000. I know in mine it is $15,000. And if real estate is involved that was titled in the decedent's name, that has to go through it, unless it was in joint names, in which case it passes automatically. Drives me crazy and makes me want to write letters. And sometimes real estate lawyers/title companies do the same thing by simply putting the heirs' names on the HUD-1. So they are hanging themselves out for liabilities if anything comes up later from potential heirs who want to file lawsuits.Last edited by Burke; 03-14-2015, 11:14 AM.Comment
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