TAXMAN Posted February 2, 2023 Report Share Posted February 2, 2023 State of VA paid to the estate 12k from their unclaimed funds for a deceased tp. Information provided by state was Proceeds 10k(no idea what was sold), dividends and other funds 2k. they listed 10K on a form 1099b with nothing else to help or even describe where funds came from. None of the forms that we have shows either the deceased# or the estate#. This all occurred a year after death. I think the dividends should be taxable to the estate but not the proceeds. Can anyone help with this? Quote Link to comment Share on other sites More sharing options...
Lee B Posted February 2, 2023 Report Share Posted February 2, 2023 If you have no basis then it's all gain. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted February 2, 2023 Report Share Posted February 2, 2023 3 minutes ago, cbslee said: If you have no basis then it's all gain. Except the estate gets stepped up basis at date of death. If they knew what the security is, the tax reporting is a piece of cake. Someone (hopefully not @TAXMAN - unless they pay him) will have to track down the producer of the 1099B and find out what the security was. I would not leave that basis out, especially in a down market, unless the TP absolutely refused to make the effort and would not pay me to make the effort. Tom Longview, TX 2 Quote Link to comment Share on other sites More sharing options...
kathyc2 Posted February 3, 2023 Report Share Posted February 3, 2023 If you look at the last year or two of 1040 of deceased, you be able to tell what the fund was. 1 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 3, 2023 Report Share Posted February 3, 2023 On 2/2/2023 at 8:09 AM, TAXMAN said: . I think the dividends should be taxable to the estate but not the proceeds The way I see it, you are looking at maximum taxable income of about $2,000 which should be taxed at the beneficiary level. You mentioned 10,000 of property sold. As Bulldog mentioned it is safe to say that will be offset by stepped up basis. Report it on Schedule D of the 1041 and call it an unknow asset of decedent. As I understand your post, that leaves $2,000 of potential income to report on the 1041. That will go on K-1 if reported on final 1041 or distributed within 65 days of estate year end. The result should be in $200 - $400 of federal income tax to beni’s,+ whatever your state might tax. If these are the only items reported on 1041, they will offset by any legal and accounting fees….etc; in full proportion. So before you spend to much time digging into this, you should consider the cost vs benefit to the estate and discuss that with them. 2 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 3, 2023 Report Share Posted February 3, 2023 15 hours ago, kathyc2 said: If you look at the last year or two of 1040 of deceased, you be able to tell what the fund was. Or if not available, look into transcripts. Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 3, 2023 Report Share Posted February 3, 2023 Maybe I am missing something, but It doesn't seem right to have $2,000 of income from $10,000 of assets. 1 Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted February 3, 2023 Report Share Posted February 3, 2023 7 minutes ago, DANRVAN said: Maybe I am missing something, but It doesn't seem right to have $2,000 of income from $10,000 of assets. I still think someone needs to dig into the 1099B and figure out what was held and sold. @DANRVANI like your suggestion above about zeroing out the Cap Gains, but I don't think I could do it myself. I don't think I could take that position and potentially have to defend it upon audit for the estate in a couple years. But I do think the estate Trustee should be able to get the information. It may just be a simple phone call to the Unclaimed Property Dept of VA, or it could be more involved. Tom Longview, TX Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 3, 2023 Report Share Posted February 3, 2023 14 minutes ago, BulldogTom said: I don't think I could take that position and potentially have to defend I would rely on the Cohan rule for a reasonable estimate of basis with in one year of DOD; if not otherwise determined. This is obviously not high dollar property (like real estate) that would have appreciated in value. On the flip side, I don't think auditor would have much of a case to deny it. Quote Link to comment Share on other sites More sharing options...
Lee B Posted February 3, 2023 Report Share Posted February 3, 2023 On the other hand the $10,000 could be taxable proceeds which don't qualify for a step up in basis. We don't really know do we? Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 3, 2023 Report Share Posted February 3, 2023 6 minutes ago, cbslee said: On the other hand the $10,000 could be taxable proceeds which don't qualify for a step up in basis. We don't really know do we? But off hand I can't think of any unclaimed property that would not receive a step up basis and sold for $10,000. Can you? What else would the proceeds be from? Quote Link to comment Share on other sites More sharing options...
Lee B Posted February 3, 2023 Report Share Posted February 3, 2023 Any Taxable Income that ended up in Unclaimed Funds Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 3, 2023 Report Share Posted February 3, 2023 6 minutes ago, cbslee said: Any Taxable Income that ended up in Unclaimed Funds But OP specifically referred to 1099 B, That tells us that property of decedent was sold and estate would have basis equal to fmv at date of death. I can not think of any circumstance where estate not have basis in property sold. 2 Quote Link to comment Share on other sites More sharing options...
Lee B Posted February 3, 2023 Report Share Posted February 3, 2023 I was definitely headed down the wrong rabbit hole Quote Link to comment Share on other sites More sharing options...
TAXMAN Posted February 4, 2023 Author Report Share Posted February 4, 2023 At this point admin is trying to contact the state to see if they can tell what was sold. The remainder $ appears to be dividends turned over to state some years back. Admin seems to think maybe 10 to 15 years ago. 1 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 4, 2023 Report Share Posted February 4, 2023 3 hours ago, cbslee said: I was definitely headed down the wrong rabbit hole and I was clawing my way out! 1 Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted February 4, 2023 Report Share Posted February 4, 2023 I guess I am not sure how that works with unclaimed property. Did they not sell whatever it was until after the decedent's death so that effectively the estate sold it? Or was it sold 10 years ago when the state received the property and they are just issuing the 1099B because they finally found out who the property belonged to so that they know who to issue the 1099B in the name of? It doesn't seem like you could move income to another year that way. This has been an interesting discussion. 2 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 4, 2023 Report Share Posted February 4, 2023 1 hour ago, Gail in Virginia said: Or was it sold 10 years ago when the state received the property and they are just issuing the 1099B because they finally found out who the property belonged to so that they know who to issue the 1099B in the name of? Good question. Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 4, 2023 Report Share Posted February 4, 2023 22 hours ago, TAXMAN said: The remainder $ appears to be dividends turned over to state some years back. Admin seems to think maybe 10 to 15 years ago. That makes sense, as mentioned above $2,000 income vs $10,000 in property does not sound right for year after death. So maybe no income to the estate. Quote Link to comment Share on other sites More sharing options...
Sara EA Posted February 5, 2023 Report Share Posted February 5, 2023 Income is taxed in the year received, so the divs will be taxed to the estate. Now to solve the $10k mystery. The taxpayer must have had some kind of basis in whatever it was. Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 5, 2023 Report Share Posted February 5, 2023 1 hour ago, Sara EA said: Income is taxed in the year received, so the divs will be taxed to the estate. Good point. So unclaimed income was received by "the state" X years ago and then paid to estate year after death. I think I will crawl back into my rabbit hole for the night. 1 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted February 5, 2023 Report Share Posted February 5, 2023 14 hours ago, DANRVAN said: unclaimed income Are we sure it was not reported on a 1099 and didn't end up on the 1040? 2 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 6, 2023 Report Share Posted February 6, 2023 12 hours ago, Abby Normal said: sure it was not reported on a 1099 and didn't end up on the 1040? There seems to be endless possibilities here. I think estate would have burden of proof that it was already taxed by decedent. Otherwise I agree with Sara, estate steps into the shoes of decedent and it becomes IRD. 1 Quote Link to comment Share on other sites More sharing options...
Lee B Posted February 6, 2023 Report Share Posted February 6, 2023 Yeah, the rabbit holes are multiplying 1 1 Quote Link to comment Share on other sites More sharing options...
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