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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10122
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Who is responsible for taxes owed by mother when there is no

Customer Question

who is responsible for taxes owed by mother when there is no estate and only non-probate assets left after her death
Submitted: 2 months ago.
Category: Tax
Expert:  Lane replied 2 months ago.

Hi. My name's Lane. I can help you here.

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If there was no income received after the date of death, then there would be no need to file an estate's income tax return (form 1041).

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But a final year tax return is normally filed by the executor or next of kin if there IS no executor. You can read more about thhat requirement here: https://www.irs.gov/businesses/small-businesses-self-employed/deceased-taxpayers-filing-the-final-returns-of-a-deceased-taxpayer

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IN the event you will use turbotax, here is some information regarding getting it done with THAT package:

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https://ttlc.intuit.com/questions/2806353-when-do-i-file-a-final-tax-return-for-a-deceased-parent-if-they-did-not-during-the-tax-year

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But in terms of who is responsible if any taxes are OWED, if there were assets of any kind (regardless pf their going through probate or not), IRS will look to the beneficiariesof those accounts that bypassed probate as they were still part of the TAXABLE estate (said differently IRS stands in line before any heirs if the taxpayer passes with tax debt already owed)

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In my experience they do not always pursue this, as sometimes the costs of pursuing can be more expensive than the tax revenue generated.

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But technically, so sorry, anyone inheriting assets that should have gone to pay hte tax debt COULD be pursued.

Expert:  Lane replied 2 months ago.

At the time of a taxpayers death, the personal obligation to pay income tax ends and the assets become an "estate." An estate may include money, investments, real estate and other resources, some of which generate taxable income and/or remain taxable property.

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It miight help to understand the law here. When you die, the IRS asserts a lien against the assets of your estate. A federal tax lien along with other debts must be satisfied out of these assets before any of the property can pass to your heirs.

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The law does not require the IRS to notify anyone of the lien: It's just there, legally, and follows the property if that property passes to the heirs and the tax remains unpaid.

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Setting up a trust, POD, TOD and other agreements which names beneficiaries and allows the estate to avoid probate, does not nullify tax obligations.

Expert:  Lane replied 2 months ago.

Please let me know if you have any questions at all, before rating me

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit") ... Otherwise JA doesn't credit me for the work here.

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Thank you!

Lane

I hold a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

Expert:  Lane replied 2 months ago.

Hi,

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Just checking back in to see if you had further questions. Let me know if my answer helped too provide clarity.

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I hope you’ll rate me (using those stars, or faces on your screen, by clicking submit) based on thoroughness and accuracy, rather than any good news / bad news content. Otherwise I’m working for no crediting at all here.

Thank you!

Lane

I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986

Expert:  Lane replied 2 months ago.

Hi,

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DId you see my answer?

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let me know if you need more here.

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Lane

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