What to do if you Received a 1099 After Filing Final Taxes

27 Monday Feb 2017

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1099's, Accounts, Adjusted 1099, Amended Final Returns, Amended Returns, Bank Statements, Brokerage Statements, decedent, Duplicate 1099, Earned Income, Executor, Final Returns, Final Taxes, Form 1040X, IRS, Issuer, State Final Returns, Tax Professional, Taxpayer

If you filed final taxes for a decedent and later received a 1099, you must amend the final returns. To include the missing income on the final federal return, you must file form 1040X. For final state returns, if required, states allow you to amend returns online. So, refer to your state taxing authority for guidance on amending returns.

In addition to amending the returns, you may also have to adjust the 1099. Typically, payers of 1099 income report income earned for the entire year. Additionally, income reported on the final returns consists only of income earned during the final year of life up until the date of death. Therefore, income on the 1099 needs adjusting to determine the amount to report on the final amended returns as explained in the article How to Report 1099 Income on the Final Return.

However, amending final returns and adjusting 1099’s should be painless. The executor should already be tracking income of the estate on all accounts. So, contact the executor for the amount of income on the 1099 to report on the final returns. If you are the executor using a tax professional, forward the 1099 with the income adjustment.

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Selling the Estate Rental Property: The Closing

20 Monday Feb 2017

Posted by Robert Dowling in Estate

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Assent Forms, Asset Settlement, Attorney, Buyer's Attorney, Closing, Deed, Deed Recording, estate, estate account, Estate Rental Property, HUD-1 Settlement Statement, Proceeds from the Sale, Realtor, Record of the Deed, Registry of Deeds

On May 6, 2013, a few days away from closing, where to have the closing became an issue. Typically, a closing would happen at the registry of deeds where recording the new deed would take place. So, after talking to my attorney, that’s where we thought the closing would take place. However, the realtor called me soon after and told me the closing would happen at the office of the buyer’s attorney. Immediately, I told my attorney of the mix up. So, my attorney called the buyer’s attorney to clear the confusion. After the discussion, both attorney’s agreed to have the closing at the office of the buyer’s attorney because of convenience.

With the issue of location resolved, my attorney called to tell me about the resolution. However, I was still curious about the last missing assent form mentioned in the article Selling the Rental Estate Property: The Missing Assent Forms. So, still on the phone, I asked my attorney, “Oh, did you receive the last assent form?”

“Yes, the form arrived a couple of days ago.” my attorney replied.

“Well, that’s a few days later than promised by the belligerent beneficiary, but at least we can finally close.”

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Selling the Estate Rental Property: The Missing Assent Forms

16 Thursday Feb 2017

Posted by Robert Dowling in Estate

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Assent Forms, Attorney, Belligerent Beneficiary, Beneficiary, Buyer's Attorney, Closing, Closing Date, Extension Agreement, Fire Inspection, Fire Inspection Certificate, Luddite, Purchase and Sale Agreement

On April 22, 2013 there were still two missing assent forms. After completing preparations for the closing as described in the article Selling the Estate Rental Property: Prepare for the Closing, there wasn’t much for me to do other than wait for the assent forms to arrive. So, that same day, after the fire inspection, I called the attorney.

Initially, the call was to inform the attorney that the house passed inspection. Then the conversation shifted to mailing the certificate to the attorney for the closing.

After that conversation, I curiously asked, “Have all the assent forms arrived?”

The attorney replied, “No, there are still two missing assent forms. The belligerent beneficiary and one other beneficiary haven’t sent them yet.”

Then the attorney asked,”Can you try to get them to send the forms by tomorrow? Otherwise we’ll have to change the closing date.”

Puzzled, I replied, “I will try.”

After the call, I put the fire inspection certificate in the mail to the attorney. Then, began chasing down the two missing assent forms.

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Selling the Estate Rental Property: Prepare for the Closing

12 Sunday Feb 2017

Posted by Robert Dowling in Estate

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Assent Forms, Attorney, Carbon Monoxide Detectors, Closing, Closing Checklist, Closing Date, Deed, Detectors, Executor, Fire Inspection, Fire Inspection Certificate, Local Fire Department, Prepare for the Closing, Prepare the Deed, Purchase & Sale Agreement, Realtor, Smoke Detectors, Tenants, The Seller's Closing Checklist

With the purchase & sale agreement signed and the assent forms trickling in, it was time to prepare for the closing. After completing the paperwork on the sale as depicted in the article Selling the Estate Rental Property: The Purchase & Sale Agreement and Probate, the time was right to complete required tasks for the closing.

The day after finishing the paperwork, the realtor sent me a list called The Seller’s Closing Checklist. The checklist included required tasks needed for the closing and was two pages long. Although the number of tasks seemed large, not all tasks were relevant to this closing. In addition, not all tasks were my responsibility; the realtor offered to complete a task, and a couple of tasks were strictly for the attorney. So, with the tasks organized, completing them should be a straightforward process.

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Selling the Estate Rental Property: The Purchase & Sale Agreement and Probate

06 Monday Feb 2017

Posted by Robert Dowling in Estate

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Addendum, Addendum to Purchase & Sale Agreement, Assent Forms, Attorney, Attorney General, Beneficiaries, Buyer's Attorney, Closing, Closing Date, Contract to Purchase Real Estate Form, Estate Rental Property, Executor, Formal Probate Process, Investors, Massachusetts Attorney General, probate, Purchase & Sale Agreement, Rider, Rider to Purchase & Sale Agreement

After signing the contract to purchase real estate, it was time to deal with the purchase & sale agreement and probate. As mentioned in the article Selling the Estate Rental Property: Accepting an Offer, investors made a cash offer to buy the rental property on April 3, 2013. After agreeing to accept the offer, both parties signed the contract to purchase real estate.

The next step in the process was to sign the purchase & sale agreement. So, on April 5, 2013, my attorney sent me the purchase & sale agreement. In addition, the buyer’s attorney sent my attorney an addendum and rider to the purchase & sale agreement, which my attorney forwarded to me. After sending all the paperwork, my attorney told me to review the paperwork and return an email with my thoughts.

Additionally, to close on the property, my attorney needed to send assent forms to all beneficiaries to get their approval on the sale of the property and the agreed upon price. So, with the closing scheduled for April 30, 2013, dealing with the purchase & sale agreement and probate were two important tasks.

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Selling the Estate Rental Property: Accepting an Offer

30 Monday Jan 2017

Posted by Robert Dowling in Estate

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Accepting an Offer, Beneficiaries, Contract to Purchase Real Estate Form, Estate Rental Property, Executor, Expenses, Home Inspection, Investors, Mortgage, Negotiate, Offers, Open House, Realtor

On the day after the open house, I never thought I would be negotiating and accepting an offer so soon. In the article Selling the Estate Rental Property: Listing the Estate Rental Property, I set the listing price to $225,000.00 and agreed to an open house scheduled for April 1, 2013. So, on April 2nd, I became anxious when the realtor called me at work. Then, I became elated when the realtor told me about three offers made at the open house. The realtor described the offers as follows:

The first offer was for $225,000.00 pending a home inspection. The realtor went on to explain that this couple will have difficulties obtaining a mortgage.
Next, the second offer was for $240,000.00 pending a home inspection. The realtor made it clear that this couple should easily obtain a mortgage.
The last offer was for $195,000.00 cash. The offer was from investors that agreed to waive the home inspection.

The third offer caught my interest and I told the realtor as much. In response, the realtor agreed with me since the house structure had some problems that a home inspection would reveal. However, I thought the price was too low. So, I wanted to discuss the offers with a few beneficiaries, including my sister. The realtor understood but told me that investors made the offer and need an answer by noon tomorrow. I told the realtor that I would call the next morning with a decision.

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Selling the Estate Rental Property: Listing the Estate Rental Property

23 Monday Jan 2017

Posted by Robert Dowling in Estate

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Beneficiary, Estate Rental Property, Exclusive Right To Sell Listing Agreement, Exclusive Rights, Executor, Listing, Listing Price, Multiple Listing Site, Property Transfer Notification Certification, Realtor, Sale Price, Tenants

On March 30, 2013, with the tenants moved, it was time to work on listing the estate rental property. As depicted in the article Selling the Estate Rental Property: The Tenants Move, the tenants found a new home and quickly moved. Therefore, on the same day I last met with the tenants, I also met with the realtor. In addition, I enlisted the help of my sister (also a beneficiary) to determine a listing price for the rental property. So, with the house empty, the three of us could walk around the rental property, and and assess the property.

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When to File the Final Income Tax Returns for a Decedent

16 Monday Jan 2017

Posted by Robert Dowling in Taxes

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Calendar Year Taxpayer, Common Estates, Credits and Deductions, decedent, Due Date, Earned Income, Executor, Filing Requirements, Final Income Tax Returns, Final Returns, IRS, State Taxing Authorities, Tax Professional

In common estates, when to file the final income tax returns of a decedent can cause confusion. The executor or surviving spouse understand that filing final income tax returns is necessary. However, questions arise about the due date concerning the filing of the final returns. This is notably true when the decedent died before filing the prior year returns. Fortunately, the IRS and state taxing authorities establish guidelines that should clear up any confusion on the due date of the final income tax returns.

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Preparing the Final Tax Returns for a Decedent

09 Monday Jan 2017

Posted by Robert Dowling in Taxes

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1099's, Bank Statements, Brokerage Statements, Common Estate, decedent, Direct Deposit, estate, Estate Administration, Executor, Final Tax Returns, Final Taxes, Financial Institutions, Rental Income, Tax Professional

If a decedent earned income in the final year of life, filing final tax returns becomes mandatory. The executor must file a final federal income tax return and a final state income tax return (if required) reporting all income earned by the decedent in the final year of life up until the day of death.

Usually, in a common estate, the executor will hire a tax professional, as recommended, to handle tax matters. However, this doesn’t exempt an executor from participating in the tax filing process. The executor should prepare the information needed by the tax professional. Otherwise, the tax professional will charge a substantial fee to handle all aspects of filing the final tax returns.

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Have a Happy Holiday Season from The Common Executor

21 Wednesday Dec 2016

Posted by Robert Dowling in Estate

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Happy Holidays

Thank you to all the followers and visitors of The Common Executor as the first complete year of the blog comes to a close. Without your interest, there wouldn’t be a second year. Therefore, because of your support, I will continue to post and grow the blog for a second year beginning on January 9, 2017. Again, I thank you for your support and I wish you all a happy holiday season.

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