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RD
RD, Certified Public Accountant (CPA)
Category: Tax
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Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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I received a check on a law settlement from the Employees Retirement

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I received a check on a law settlement from the Employees Retirement System of Georgia made payable to my mother's estate, which has been dispursed and final income tax was filed two years ago. They included a substitute Form 1099-R with taxable amount undetermined. No Federal or State tax amount was withheld, only attorney fees. What do I need to do about paying the taxes on this money?
Submitted: 4 years ago.
Category: Tax
Expert:  RD replied 4 years ago.

Are you the beneficiary receiving these funds?

 

What was the settlement for?

 

 

Customer: replied 4 years ago.

I am one of the executors with my sibling, and the money will be divided among six siblings.

 

I am not positive exactly what transpired to bring about the law suit, but someone filed a suit because retirement funds from a certain period of time were not figured by the correct formula.

Expert:  RD replied 4 years ago.

If this is a settlement for retirement fund distribution than the entire amount is taxable to the recipient(as Income in respect of decedent) as Other income and taxed on your personal tax return just as it would had the decedent taken the distribution.

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

Customer: replied 4 years ago.
Who would be the recipient if the check is made payable to the estate with the names of the co-executors, but is split among six people, and her estate has been finalized as far as taxes are concerned?
Expert:  RD replied 4 years ago.

The estate income tax return needs to be filed and the income needs to be reported on Form 1041 and k-1 be issued to each of the beneficiaries with their share of the distribution.

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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