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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22829
Experience:  Taxes, Immigration, Labor Relations
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My mother was deceased in a foreign country in 2009. She had

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My mother was deceased in a foreign country in 2009. She had 2 real estate properties in USA that produce rent. I have been filing her income tax return every year. She never had or claimed social security benefits. How can I strengthen out the situation now.
Who do I need to inform that she no longer lives, how can I change the titles of her properties, and how can I start reporting her rents under my own income tax in order not to do an income tax for her anymore?
Thank you
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Lev :

Hi and welcome to our site!
The first step would be to file her final tax return.

Lev :

If the taxpayer dies - all income received by the taxpayer up to the day he/she passed away is reported on the final tax return of the decedent. The income received before the death will be taxable on the decedent final return on form 1040. Write "DECEASED," the decedent's name, and the date of death across the top of the tax return.
The decedent's income includible on the final return is generally determined as if the person were still alive except that the taxable period is usually shorter because it ends on the date of death. You must attach Form 1310 to all returns and claims for refund - so refund checks will be issued with your name - www.irs.gov/pub/irs-pdf/f1310.pdf

Lev :

The income received after she died is reported on the trust's income tax return - form 1041 - www.irs.gov/pub/irs-pdf/f1041.pdf
The estate will report distributions to beneficiaries on form K-1 - www.irs.gov/pub/irs-pdf/f1041sk1.pdf - that form reports to beneficiaries taxable part of their distribution.
You will continue to file estate tax returns until all properties are transferred to your name and the estate is closed.

Lev :

To transfer properties to your name - you need to go to via probate process.
You should provide her death certificate from the foreign country where she passed away to the probate court. Probate is needed to pass ownership of inherited assets to beneficiaries.
You may review some details of the probate procedure in Florida here - http://www.floridabar.org/tfb/tfbconsum.nsf/48e76203493b82ad852567090070c9b9/92f75229484644c985256b2f006c5a7a?OpenDocument

Customer:

The final tax return I filed was for 2012. As I said before, I kept reporting her income as if she was alive because i had also done it in the past when she was still alive. Is this the final tax return that I need to file? Or the one that was submitted in the year of hear death?

Lev :

If your mother passed away in 2009 - the final tax return MUST be filed for 2009. It would not be correct to file tax returns after the person passed away...
And in this tax return - you as a personal representative should include ONLY income and expenses up to the date she passed away.
If you files her tax returns as if she were alive - that should be corrected - and estate tax returns must be prepared for these years.

Lev :

The estate started after the decedent passed away - and it is a separate legal and taxing entity. That means the estate has to apply for a separate tax ID - and may not use her deceased social security number.
As an executor of the estate - you need to obtain an Employer Identification Number (EIN) from the IRS for the estate - and will use this ID on tax forms for the estate.
There are several ways she may apply for the tax ID - see details here - http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN
Or you may also use this form - http://www.irs.gov/file_source/pub/irs-pdf/fss4.pdf

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22829
Experience: Taxes, Immigration, Labor Relations
Lev and 2 other Tax Specialists are ready to help you
Expert:  Lev replied 1 year ago.
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