DANRVAN

1 hour ago, Lee B said:

A classic case of Income in Respect of a Decedent

Does not sound like IRD to me.  

If it were IRD, it would have accrued before death and paid after death.

This sounds like a case of 2023 interest paid on account that was not transferred from name of spouse who died three years ago.

18 minutes ago, kathyc2 said:

, any fees you receive related to the operation of the trade or business

That would be the case if the PR was paid extra to operate the trade or business.  

If the PR fees are paid strictly as a percentage of the estate assets  you would not allocate any amount to the operation of the business per RR 58-5.

4 minutes ago, Catherine said:

But the executor still needs to report the income, yes?

Yes, but not subject to SE tax.

You also do not 1099 accountants or attorneys unless directly related to a trade or business.

11 minutes ago, Catherine said:

and now I need to get a 1099 out pronto. 

Not required.

The payment was not related to a trade or business of the estate; but instead to the admin of the estate.

2 hours ago, Terry D EA said:

Be careful with the Medicaid rules. Because the TP is a family member, Medicaid may call this an improper transaction and disallow coverage

I would never give out advice on MC rules, but  I "think" a family member is allowed to be caregiver if through an "arms-length" transaction.

"Granddad to file sch H"

That appears to follow the fact pattern.

2 hours ago, schirallicpa said:

But now - 2 years later - he gets a 1099C because the debt was discharged and his payments apparently didn't go to the CC company and the debt relief company cannot be found.

He was scammed and TCJA suspended any possible deduction.  There was a bill introduced last month to reinstate the T & C Loss deduction, but I don't think it has gone anywhere.

Unfortunately she needs to report the COD income.

2 hours ago, schirallicpa said:

1099-int from an account that was in her name.  Does he need to claim it?

If this was from an oversight of changing account from wife then yes, he needs to claim it;  and get the account ownership transferred.

Donations to a 501(c(13) are deductible per IRC 170(c)(5).

And like any other donation cannot be restricted of benefit any particular individual.

You can't donate $1,000 to specifically bury uncle Fred.

1 hour ago, Corduroy Frog said:

assure deduction for anything else is to exercise Form 1024 for a 501(c)3.

A cemetary must apply under 501(c)(13).  The user fee was most recently $600.  

Section H of the form is used for 501(c)(13).

The questions in section H are simple yes or no; as long as you meet the basic requirements that the funds are used for the upkeep of the cemetery and there is no intent to sale or subdivide the land.

I filed one last year with no issues.

2 hours ago, Lee B said:

, he doesn't qualify for automatic approval using form 5305 - SEP.

but that does not mean he cannot open up a SEP.

He needs to see his financial advisor to hammer out the details.

31 minutes ago, Lion EA said:

open and fund a SEP

Up to the lessor of 25% of compensation or $66,000.

SEPs work well with S Corps.

2 hours ago, Christian said:

gets both the EIC and the Child Credit for him

correct

3 hours ago, NECPA in NEBRASKA said:

I have her interest income,

From bank accounts?

1 hour ago, Lee B said:

only be helpful if she deposited all of the cash

but might be only record of any income, whether complete or not.

Is son personal rep?  Maybe he would at least authorize bank to release statements to you.  PR is responsible for filing final tax return.

3 hours ago, gfizer said:

Does anyone here have any experience with this type of thing? 

Yes fairly recently.  See 501(c)(13).

1 hour ago, ILLMAS said:

how they do it. 

The are part of a bigger E.O., the Church.

4 hours ago, BulldogTom said:

explain that you have a conflict between the two

Actually in this case there is no conflict.

 Mother is the custodial parent,  she can  either claim the dependent or release it to Dad's estate.

 His estate has no choice in the matter  and can only claim the dependent via form 8332.

17 hours ago, Patti in Upstate NY said:

I'm leaning towards leaving the son on Dad's return

On 2/13/2024 at 6:08 PM, Sara EA said:

Since the child did not live with Dad half the year, better use Form 8332,

Sara is correct.  There is no doubt that ex is custodial parent and you are aware of that fact.  But you need to confirm that with her.

I suggest you meet with her first and explain that she has the option to release dependent by filing 8332.

Off the top on my head, I don't see any ethical issues in this scenario.  

21 minutes ago, Lee B said:

I am trying to get on top of this so they don't have any big surprises when I do next year's return.

I have had clients receive payments and W-2s from DHS that were for non-foster care and taxable.

2 hours ago, Lee B said:

As I understand it these payments are not reportable or taxable.

See section 131.

I would make sure that the payments are in fact for foster care.

Did they receive W-2s form DHS?

5 hours ago, BulldogTom said:

get the credits and deductions as if they lived the whole year?

If they are otherwise entitled to them, but I am not aware of any exception to the dependent rules in his favor.

In this case child did not live with dad for over 1/2 year, so mom would win in a tie breaker case since child lived with her the greatest number of days.

On 2/13/2024 at 4:10 AM, Patti in Upstate NY said:

As per their agreement, the children lived one week with their father and one week with their mother.  Dad claimed their son and Mom claimed their daughter.

But in fact, only one can be the custodial parent for tax purposes in a normal 365 day year, since the child could only spend 183 nights with one parent.  If one parent breaks the agreement it is a legal issue, not a tax issue.

For 2023 it looks like mom is clearly the custodial parent (unless there is some special rule for the deceased taxpayer).

You might be able to navigate through form 8867 in favor of deceased dad, keep in mind mother would prevail in tie breaker case.

6 hours ago, BulldogTom said:

1099INT from the insurer this year in addition to the 1099R

Interest taxable for sure.  

10 hours ago, BulldogTom said:

 I am inclined to believe the calculation of the Insurance company on the surrender.

I would check it out to be sure they are not overlooking any premiums that were not paid back as dividends.

5 hours ago, Gail in Virginia said:

If that is the only income, is a return required if the amount is greater than $600?

If the SSA-1099 was under the estate EIN it would be a good idea to report the gross and deduct the nontaxable portion in order to prevent an under reporting letter.

4 hours ago, Gail in Virginia said:

I don't see a place for 1099-SSA - just 1099-R,, etc. 

Report any taxable amount as other income.

4 hours ago, Gail in Virginia said:

If that is the only income, is a return required if the amount is greater than $600?

I believe an estate is treated as any other taxpayer under section 86(b).

86(b) does not make any reference to "individual" vs estate.  Instead the code refers to any taxpayer in which the taxable portion of benefits applies.

Therefore in my opinion an estate is treated the same as an individual in computing the taxable amount.

1 hour ago, kathyc2 said:

I wonder there were none of these that the payment was made to the estate. 

I have seen it and reported as mentioned above.