How can the IRS collect from a deceased person when there is no estate?
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How can the IRS collect from a deceased person when there is no estate?
My mother died about 2 1/2 years ago. She had no Will or property but did have a transfer on death account worth about $140,000 which was cashed out under her SSN and distributed in equal shares to her children. The IRS wants the family to complete a tax return for her. What do you advise?
Asked on September 10, 2012 under Estate Planning, Texas
Answers:
Catherine Blackburn / Blackburn Law Firm
Answered 11 years ago | Contributor
I am not tax lawyer or tax accountant. I suggest you get one and follow their advice. The Internal Revenue Code defines "estate" in a very broad way and definitely will reach the bank account that you mentioned. It does not matter that no one opened a formal probate for your mother.
On the other hand, $140,000 is well below the federal estate exemption applicable 2 1/2 years ago. It is very likely that no estate tax will be due. I cannot speak to any estate taxes applicable to your state as Florida has no estate tax.
You may be liable for penalties as a result of failing to file a return. This is why I strongly recommend that you find a good accountant with IRS experience to help you. With that assistance, you should be able to wrap this up with a minimum of difficulty.
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