I am the personal rep for the small estates of both my late mother and father, who passed away last year in that order. I opened bank accounts using EIN numbers in the name of the estate of each of my parents. I began to get checks this year and deposited these 4 into those accounts:
1) 1st check to close account in mother's name at the nursing home
2) 2nd check to close account in mother's name at the nursing home
3) Life insurance check for father (private insurance)
4) Fed employees group life insurance check for father (other 3 siblings also received a check for 1/4 of the total proceeds)
I have since received the first of the below 3, and am expecting the other 2 later this year:
a) Check to close account in father's name at the nursing home
b) Balance of father's retirement pay for month he passed away - 11/2012
c) Expected proceeds for small life insurance claim in mother's name
As my parents sold their house, and the proceeds went to Medicare
and/or Medicaid, the above represents all of what we 4 siblings would "inherit" from our parents.
The life insurer for my father's private life insurance said that, because their debt interest on the amount was below $600, that they would not report this to the fed government, thus, no taxes
were due. This is even after they'd insisted I had to open the account in the name of my father's estate (and so apply for an EIN) as a condition to issuing a check for the claim. Also, I was told by the fed gov't. that the balance of my father's retirement pay was not considered part of his estate.
Which of any of these proceeds or checks for claims must be reported for estate taxes
or personal income taxes
? And, is my depositing them into the bank account for the estate of either parent making them taxable as such?