Selected answers:
2. Correct as far as federal estate taxes go. There will be income taxes owed on the income, either on the decedent's final income tax return, on a 1041 fiduciary return, or on the beneficiaries' returns.
2 (again![;-)]( "Wink")
). I'm assuming the decedent named their trust as the beneficiary. Contact each institution for their procedures. Typically after the executor provides a copy of the death certificate, each institution would open four individual accounts for the four beneficiaries then transfer in-kind (i.e. without selling) 25% of the assets from the decedent's original account into the beneficiaries' accounts. The beneficiaries could then sell or possibly transfer the assets after that happens.
3. Capital gains do not apply to 401(k)s nor IRAs - all distributions from those accounts will be ordinary income to the beneficiaries (there is a small possibility of pretax contributions on the decedent's most recent Form 8606, but that is unlikely). The brokerage account assets get a mark up (or very rarely a mark down) to FMV as of date of death. The beneficiaries then would pay long term capital gains on any changes from date of death FMV.
5. Probably. Real estate practices vary around the country, but the most common practice is for taxes and utilities (water / sewer / gas / electric) to be prorated as to the date of transfer, which in this case is the date of death.
You didn't ask about the 529, but hopefully the decedent named a successor owner on the account. Check with the 529 plan. They'll probably want a copy of the death certificate in order to transfer it to the successor owner. If no successor owner was designated, then I would guess that the executor could name one, but ask the 529 plan on that.
2. Correct as far as federal estate taxes go. There will be income taxes owed on the income, either on the decedent's final income tax return, on a 1041 fiduciary return, or on the beneficiaries' returns.
2 (again
). I'm assuming the decedent named their trust as the beneficiary. Contact each institution for their procedures. Typically after the executor provides a copy of the death certificate, each institution would open four individual accounts for the four beneficiaries then transfer in-kind (i.e. without selling) 25% of the assets from the decedent's original account into the beneficiaries' accounts. The beneficiaries could then sell or possibly transfer the assets after that happens.3. Capital gains do not apply to 401(k)s nor IRAs - all distributions from those accounts will be ordinary income to the beneficiaries (there is a small possibility of pretax contributions on the decedent's most recent Form 8606, but that is unlikely). The brokerage account assets get a mark up (or very rarely a mark down) to FMV as of date of death. The beneficiaries then would pay long term capital gains on any changes from date of death FMV.
5. Probably. Real estate practices vary around the country, but the most common practice is for taxes and utilities (water / sewer / gas / electric) to be prorated as to the date of transfer, which in this case is the date of death.
You didn't ask about the 529, but hopefully the decedent named a successor owner on the account. Check with the 529 plan. They'll probably want a copy of the death certificate in order to transfer it to the successor owner. If no successor owner was designated, then I would guess that the executor could name one, but ask the 529 plan on that.
Statistics: Posted by secondcor521 — Fri Sep 13, 2024 10:51 pm — Replies 2 — Views 146