IRD question

[Catherine]

One of my elderly clients died in early December and I'm wondering how to work the final joint return/final 1040. Every penny they had was in savings accounts at various banks. Everything went to the widow, but re-titling wasn't done until late in the year or even early January. (The attorney and her nephew have been helping her with this, and the attorney will handle any estate return necessary).

He handled all their money, and this year coming up is going to be very hard for her -- she's going to need to learn to handle her finances, at 90, and remember to make estimated payments, etc.

All the 1099-INT's have the full year of interest for him. I was wondering if just peeling off 1/12 the annual interest from his 1099-INT's (adjustment to box 1 as nominee) and using that for his final short-year 1040 would suffice. I really don't see any other way to do this without an extension, and then POA's from her to get details from banks -- all very stressful for her -- for no difference in tax.

Thoughts? Opinions?

TIA,

Catherine

[JohnH]

One tip regarding estimated tax payments, especially for elderly clients. If the money's in the bank, just have them pay the whole year's estimate in April. Then there's nothing to remember until next year. Several of mine do that, even when there are several thousand dollars of tax involved. If interest rates were very high this might not be so smart, but given the current interest levels and the little bit of earnings foregone, it sure keeps their stress level down. (Plus youi;re not getting those panicky "what do I do now" calls in late June, Sep, and Jan)

[ljwalters]

I had a situation like this a couple of years ago (the stock sales of the decedent came in his name. I filed a 1040 for him and steeped up the basis with a note that the stock was sold by the beneficiary's with a steeped up basis. This flew just fine. If this is a community property state and they usually file a joint return, a 1040 mfj, checking the box as spouse filing on behalf, should suffice. But of course this all depends on weather there is any one contesting the fact that the spouse gets everything.

As far as your client ant age 90 learning to pay her bills and handle all her financial needs, maybe you should suggest personal financial assistant is what she needs. This is one of the small businesses I do. I have several clients that never had to worry about paying bills and balancing checkbooks or credit cards in their life. Most of my clients are men believe it or not. The service I provide includes the client in as much of the activity as possible; picking up and sorting mail, deciding whether or not to keep a magazine sub., then I pay their bills for them on line, make the transfers from their saving to checking (bill pay account), keep an eye on their CD and stock accounts. etc.. They always write me a check, their only bill not paid on line. I charge any where from $150 to $300 per mo. depending on the time and extent I am needed. This is usually better than a relative (especially if there is more than one beneficiary for Her estate). Senior abuse is very prevalent in the financial area and just a word from a well meaning neighbor can cause all sorts of legal hassles even if there is no wrong doing, and the courts in CA anyway will just appoint a person to do what I do at a much higher fee. I do not know how she would go about finding someone in your area maybe the lawyer would know. All of my clients have come by work of mouth.

Just a suggestion.

Linda and buddy

[TAXBILLY]

I provide a free service for my clientele by mailing them their 1040-ES coupon and an envelope a month before due and then we call them a week before to make sure they paid it. They are very appreciative of the reminder and the baked goods (cookies, brownies, etc) we get at tax time make up for the few minutes it took to handle it. When they pass away their children usually remark about how we helped mom and/or dad.

taxbilly

[Kea]

Generally when one spouse passes, I just keep filing the joint return & don't move anything anywhere (for year of death). When the decedent is single then I go the more complicated route you suggested.

[Catherine]

Generally when one spouse passes, I just keep filing the joint return & don't move anything anywhere (for year of death). When the decedent is single then I go the more complicated route you suggested.

I should probably check with the attorney and see how detailed she's going to get. I referred the widow to her, so she should at least be able to tell me that much.

And this route has the additional advantage of putting off finishing up until Monday at the earliest.

Thanks!