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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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When I die does my estate have to pay total taxes due on an

Customer Question

When I die does my estate have to pay total taxes due on an installment plan or can they pay it as payments are received. We live in PA.
Submitted: 10 months ago.
Category: Tax
Expert:  emc011075 replied 10 months ago.

Hi. My name is ***** ***** I will be happy to help you.

Your estate will have to settle all your debt, including IRS or state debt before anything is distributed to beneficiaries.

What do you mean with "as payments are received"? Do you mean continue in your installment agreement?

Customer: replied 10 months ago.
I have a 30 year installment plan from selling company stock. I have been in it for 3 years so far: recieve 108000 per quarter. How and when will this note be taxed when I die; it will continue after my death.
Expert:  emc011075 replied 10 months ago.

Ok. So you are talking about installment plan that pays you, not the IRS installment plan.

IRS doesn't allow installment sale on sale of company stocks or securities so I am not exactly sure what's the arrangement.

If and how the payments continue after your death it is question for the broker or administrator of the plan.

If your beneficiaries inherit the payments, the interest received after your death will be taxable income to the beneficiaries, interest received before your death will be taxable to you or the estate.

Usually, an installment plan/payment consist of repayment of principle and interest. The interest is taxable, the principle is not.