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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2927
Experience:  IRS licensed Enrolled Agent and tax instructor
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My client who had a sole-proprietorship passed away. This

Customer Question

My client who had a sole-proprietorship passed away. This left the business to his estate. His wife is sole beneficiary. If she takes money from the business is this taxable to her.?
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.

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

Sole proprietorship is considered disregarded entity for tax purposes which means business assets is owner's asset. The sole proprietorship dies with the owner so the business is now her asset. She can liquidate it or use the money however she wants without tax consequences. The final business return - Schedule C - will have to be filed, if it wasn't done yet, and if the business generated profit, there will be tax due.

If the spouse want's to continue the business, she will have to apply for a new EIN and run it as her own.

Expert:  emc011075 replied 1 year ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with?

And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.