Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

Mom passed with $70,000 in three accounts. Two are normal…

Mom passed with $70,000...

Mom passed with $70,000 in three accounts. Two are normal investment accounts in which she received 1099s and filed income taxes. On these two, her son is a JTROS. 1) Will he have to pay taxes on any withdrawals. The third is an annuity account that was not annuitized. Her daughter is the beneficiary and will receive a death benefit and plans on using the money to pay for funeral expenses. There will be some funds left over. 2) Are any of those taxable? Mom and all her kids live in Michigan.

Accountant's Assistant: The expert will know how to help. Is there anything else important you think the expert should know?

There is no will and nothing to go through probate.

Show More
Show Less
Ask Your Own Tax Question
Answered in 1 minute by:
8/14/2017
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,442
Experience: Certified Public Accountant
Verified

Hi, my name is Mark. I will be happy to help you with your questions. Please give me a moment to prepare your response.

Ask Your Own Tax Question

For the stock account the son will inherit his mother's basis on half of the account. On the other half of the account there will be a step up in basis to the fair market value at the time of her death. He may need to pay taxes if stocks are sold for the distributions or dividends have been received after the death of his mother.

IRS Publication 575 says that, in general, those inheriting annuities pay taxes the same way that the original annuity owner would. In turn, taxation of annuity distributions depends on whether they started before or after the required starting date for payouts.

If the daughter elects periodic distributions, then the portion of each payment that comes from accumulated earnings is taxable, while the portion that comes from the original premium payment is not. If you elect non-periodic distributions, however, the IRS typically treats distributions as taxable earnings until they're used up, after which further payouts are treated as return of the original premium payment, and therefore not taxable.

Ask Your Own Tax Question
Customer reply replied 11 months ago
I think I understand. On the stock accounts, which were really mostly bonds, she always had the dividends and distributions reinvested. So her basis should be near the actual value.If most of the annuity is used for funeral expenses - and the checks are cut directly to the funeral home, etc., are those exempt from being taxed?

For the stock account, the may be a small step up in basis if any of the bonds appreciated but I would agree that it is probably close to fair value.

The annuity would be taxed a little differently. It would be taxed the same way that if it was distributed to the mother. If the distributions are non-periodic then these would be taxable since they would be coming from the earnings. The daughter would receive a 1099-R for the distribution and the amount that is taxable.

Ask Your Own Tax Question

If this answered your question I would appreciate if you would take a moment to rate my response. There should be stars located above the question. This is the only way that I will receive credit for helping you today. If you have additional questions or need clarification I would be happy to continue the conversation. Thank you.

Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,442
Experience: Certified Public Accountant
Verified
Mark Taylor and 87 other Tax Specialists are ready to help you
Ask your own question now
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Mark Taylor Your Own Question
Mark Taylor
Mark Taylor
Mark Taylor, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2,442
2,442 Satisfied Customers
Experience: Certified Public Accountant

Mark Taylor is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
We recently lost my mother in law who had 4 annuities set up
We recently lost my mother in law who had 4 annuities set up with trust, upon her death the benefits from the annuities will be sent to the trust, will we be taxed on this if the benefits are then dis… read more
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,465 satisfied customers
Second opinion] My mother passed away Aug 2016 In putting
Second opinion] My mother passed away Aug 2016 In putting together her final return she will owe taxes as she took a large IRA distribution in 2016 to help pay for her nursing home stays and illness.W… read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
My 2 sons under 40 are beneficiaries in a simple trust
my 2 sons under 40 are beneficiaries in a simple trust holding an annuity contract. i am the trustee, age 59. the principal amount was from a life insurance settlement of my deceased husband who would… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
MY Uncle passed in October. He left me as a beneficiary of a
MY Uncle passed in October. He left me as a beneficiary of a metlife annunity pay out for the next six year. i get 396.00 each month in my checking account. i have not files my taxes because i was wai… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I am receiving around $300,000 inheritance from my father
Hi Pearl, I am receiving around $300,000 inheritance from my father who passed on 10/1/16. His estate is in probate right now and there are bits and pieces of the total amount coming to me but not at … read more
Christopher B, Esq
Christopher B, Esq
Attorney
Juris Doctor
1,847 satisfied customers
My mother sold her house in Jan 2014. The funds were deposited
My mother sold her house in Jan 2014. The funds were deposited in her checking account. My mother died in Jun 2014. I was an active participant in the joint checking and savings account my mother had.… read more
CFEPro789
CFEPro789
Fraud Analyst
Master\u0027s Degree
369 satisfied customers
I am a financial advisor with a deceased client who had a non-qualified
I am a financial advisor with a deceased client who had a non-qualified annuity of which the beneficiary is her living trust. Her living trust states that all assets will be distributed equally betwee… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
My wifes mother passed away last December. Her father pre-deceased
My wife's mother passed away last December. Her father pre-deceased her mom two years before that. Her mother's Will names my wife and her sister as the sole heirs and beneficiaries. Her home is owned… read more
jgordosea
jgordosea
Enrolled Agent
Bachelor's Degree
2,885 satisfied customers
I put my mothers money in an annuity, and she passed away in
I put my mothers money in an annuity, and she passed away in Nov. of 2010, so I took $58,000 out of her annuity, and it was wire transfered to my checking account. I wrote 2 checks to my brother and s… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
I am the beneificary of both a qualified and non-qualified
I am the beneificary of both a qualified and non-qualified annunity. I want to take the lump sum option. I thought inheritence monies are not taxable. Is this true? What are my options?… read more
abci168
abci168
Principal
27 satisfied customers
My wife claimed an $8000 Fund account from her mother who passed
My wife claimed an $8000 Fund account from her mother who passed away. This is the only thing in her estate. Fidelity paid the check to my wife under her ss#. Should we get an estate tax id # XXXXX ch… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
My mother has just passed away putting her CDs, annuity, life
My mother has just passed away putting her CD's, annuity, life insurance policy and house in a trust between by brother and I. I need cash to pay her bills right now. What is the best route to take to… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
If a mother states in her will that her money will be split
If a mother states in her will that her money will be split evenly between her two daughters, and than assigns a daughter, who is executor of the will, as the sole beneficiary of an annuity, does this… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
I recently had two parents pass away and im the executor of
I recently had two parents pass away and i'm the executor of the will. The estate has a home, property, 401k, annuities, life ins and everythning is being turned over to me to split with my sister and… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
Which assets can be used to pay administration ...
In what order can specific assets be used to pay administration expenses (attorney, funeral and executors commissions) for New Jersey estates when there is not enough in the residual estate to pay the… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
Re inherited IRA --mother dies, leaves son IRA. He ...
Re inherited IRA --mother dies, leaves son IRA. He takes distributions over his lifetime. He dies, remaining assets in IRA go to his wife, she stretches it and takes required distributions over HER li… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
My mom died and had a living trust with some Annuities. I ...
My mom died and had a living trust with some Annuities. I received the death benefit ($90k, her initial investment was $40k) for the annuity. Do I need to report the income and on what form? I was tol… read more
Lou
Lou
High School or GED
272 satisfied customers
My mother passed away recently with permanent residence in ...
My mother passed away recently with permanent residence in Michigan for 1 1/2 years. Her estate is roughly $660,000 all in mutual funds and/or annuities. My sister and I are sole beneficiaries. We are… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x