Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

I have a complex estate tax question. It's from my mom's…

I have a complex...

I have a complex estate tax question

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

It's from my mom's annuity which is currently pending litigation

Show More
Show Less
Ask Your Own Tax Question
Customer reply replied 3 months ago
My mom had about $800,000 in annuity. She passed away. My brother and I are listed as 50/50 beneficiary. My sister is contesting the validity of the change of beneficiary. She contends that the previous beneficiary form should be declared vaild which listed her and I as 50/50.The case is currently pending trial. My 50% claim is vaild with either outcome in the case but my brother and I have agreed to split the proceeds 50/50 regards ***** ***** outcome.So my question is... If the court releases 50% of the annuity funds to me, how can I split that with my brother now, and then if we win, split the other 50% that would be released to him?
Answered in 40 minutes by:
3/28/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,112
Experience: Taxes, Immigration, Labor Relations
Verified

If distribution will be issued to you - and will be reported o 1099R under your name and your SSN - you will not be able to split tax liability.

What you may do - open an inherited IRA account - transfer funds into that account and spread distribution over several years - to reduce tax pressure.

You will be able to gift the money to your brother as you wish - but will not be able to shift to him your tax liability.

Questions?

Ask Your Own Tax Question
Customer reply replied 3 months ago
What if I kept say enough to cover the tax liability - say 37% extra and then split the remaining with him. Would I be able to gift the approx $200,000 to him tax free?

that will be between you how to divide proceeds and how to cover tax liability.

The gift is not taxable income for the recipient - so your brother will not need to claim that amount as income.

For you as a donor - the gift above $15,000 is reported on gift tax return.

However - you will NOT pay any gift tax as long as you have not reached your lifetime limit - that increased for 2018 to $11,200,000.

So - no tax liability but yes for gift tax return filing.

Ask Your Own Tax Question
Customer reply replied 3 months ago
Very good. Now since our sister has forced us into litigation to recover what was right fully me and my brothers inheritance, we have incurred large sums in attorney fees. Will we be able to deduct those attorney fees from our taxes?

Yes - as these are expenses related to taxable income.

According to the IRS -

You can deduct expenses you pay for the purposes

1. To produce or collect income that must be included in your gross income;
2. To manage, conserve, or maintain property held for producing such income; or
3. To determine, contest, pay, or claim a refund of any tax.

These include - Legal fees related to producing or collecting taxable income or getting tax advice.

Ask Your Own Tax Question
Customer reply replied 3 months ago
Is the income taxable? Does this not fall under inheritance tax?

Several issues

1. There is NO inheritance tax on the federal level - while some states do have state inheritance tax

2. For income tax purposes - inheritance is not taxable.

3. However income received AFTER assets were inherited - is classified as IRD - income in respect of the decedent - and such income is taxable as it would be received by the deceased if he/she were alive. Distribution from the annuity is an example of IRD. So annuity distributions are taxable for the beneficiaries.

Ask Your Own Tax Question
Customer reply replied 3 months ago
The pay on death counts as a taxable distribution? And if so, what is the income classified as?

If paid out of annuity - yes - that is taxable distribution.

If paid based on separate life insurance policy - that is not taxable.

Ask Your Own Tax Question
Customer reply replied 3 months ago
if my payout is $400,000 but I only receive $250,000 after attorney fees, I have to pay taxes on $400,000 but I can deduct the attorney fees?

You will include full taxable distribution into your gross income

and separately deduct attorney fees expenses as part of your itemized deduction.

Your tax liability will be determined on TAXABLE income (after deductions), filing status, etc .

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,112
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Customer reply replied 3 months ago
Last question toward this... I've paid about $30k in attorney fees so far to collect this inheritance in 2017. Even though the court has not yet awarded the money to me, can I deduct those fees off my 2017 tax return?

You will need to keep receipts and will deduct legal expenses when taxable income is realized.

Ask Your Own Tax Question
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 Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,112
33,112 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev 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
With regards to my last annuity dispute question... The
With regards ***** ***** last annuity dispute question...The court is going to release in a partial summary judgement 50% to me as a beneficary and the other 50% is still in contention between my brot… read more
Lev
Lev
Tax Advisor
33,112 satisfied customers
A trust was in operation until the beneficiaries each turn
A trust was in operation until the beneficiaries each turn 30 years old. There are two beneficiaries. At age 30 each beneficiary gets their 50% share. The oldest beneficiary turned 30 a couple of year… read more
Lev
Lev
Tax Advisor
33,112 satisfied customers
Mother died 9/28/2017. She was 90 years old, lived in
Mother died 9/28/2017. She was 90 years old, lived in Nursing Home with N ursing … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Company pension plan has choices of lump sum or annuity -.
Company pension plan has choices of lump sum or annuity for life-long. If one chose annuity but before beginning receiving benefit, his/her long-term marriage ended. Will the beneficiary still be elig… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I have a tax question. My brother is one of 5 beneficiaries
I have a tax question. My brother is one of 5 beneficiaries of my late mom's trust. We have agreed to a buy-out from him. The only asset is 1/2 of a home that he was T-i-C with my mom. Therefore he is… read more
Lev
Lev
Tax Advisor
33,112 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
My Dad passed away last year. My brother and I are the trustees
My Dad passed away last year. My brother and I are the trustees of the trust that received 111K (1099 says 48 taxable). We opened an account last April, the money was sent into the trust account. We t… read more
winktax
winktax
Enrolled Agent
Master's Degree
349 satisfied customers
There is a lis pendes on a NJ property that keeps us from being
There is a lis pendes on a NJ property that keeps us from being able to evict the brother-in-law and yet keep paying the taxes to keep house for my mother-in-law. Becuase we can't evict him he's been … read more
Jax Tax
Jax Tax
Senior Tax Attorney
Master's Degree
1,363 satisfied customers
My mom was in a nursing home for 2-3 years prior to her death.
My mom was in a nursing home for 2-3 years prior to her death. Her annuities and social security paid for it until about September 2010. She passed away June 2011. My brother has been making small mon… read more
Lev
Lev
Tax Advisor
33,112 satisfied customers
My mom is 84 and has a traditional IRA. Mom has sufficient
My mom is 84 and has a traditional IRA. Mom has sufficient income and doesn't need the mandatory disbursements. Does it make sense to convert the IRA to a Roth? If we split the tax payment and she die… read more
jgordosea
jgordosea
Enrolled Agent
Bachelor's Degree
2,885 satisfied customers
How do I avoid or reduce paying taxes as the beneficiary (two
How do I avoid or reduce paying taxes as the beneficiary (two $500k policies - I'm 100% beneficiary of one of the policies and 70% beneficiary of the 2nd; my brother receives the other 30% and my fath… read more
Gerri A Harrison CFP EA
Gerri A Harrison CFP EA
Financial advisor/Tax preparer
Bachelor's Degree
86 satisfied customers
Brother told me he was leaving me $180,000. He died in Jan,
Brother told me he was leaving me $180,000. He died in Jan, 2010. Money was in annuity with his wife and I being beneficiaries. The money was paid to his wife. She then deducted money for taxes and se… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
My mother passed away recently, I have 3 brothers & 1 sister,
My mother passed away recently, I have 3 brothers & 1 sister, my Mother left some small Annuitys, IRA's and a Trust Fund. Are all these items taxable? Do we as individuals have to pay any Federal & St… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
My mom passed in 2008. She had an annuity, cd, and some small
My mom passed in 2008. She had an annuity, cd, and some small stocks. Probate was finished in 2009. My brother and I split 50/50 and two nieces got $1000 a piece. My brother and I each got about $8900… read more
Wendy Reed
Wendy Reed
Master Tax Advisor Enrolled Agent
Master's Degree
60 satisfied customers
My mom and dad passed away a few weeks ago. The will states ...
My mom and dad passed away a few weeks ago. The will states that me and my sister split the money half and half. My sister is fine with this.. however the anuities that my mom and dad had over 200,000… read more
Bill
Bill
Master's Degree
2,278 satisfied customers
My mother died and left a will that my stepdad forced my ...
My mother died and left a will that my stepdad forced my mother to sign. She voiced this on several occations. My halfbrother is the executor and is not going to probate the will because it is not fai… read more
Wendy Reed
Wendy Reed
Master Tax Advisor Enrolled Agent
Master's Degree
60 satisfied customers
I am going threw a divorce ,my husband and I own many ...
I am going threw a divorce ,my husband and I own many properties 2 restaurants and more.but we are partners 50/50with my husbands brother.to make a long story short the both of them took everything of… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
My brother and I are due my mothers IRA because of her ...
My brother and I are due my mothers IRA because of her death this year. The amount is 350,000 and she did not name either of us as a beneficary. The account is at Schwab and they have told me that I, … read more
Christopher Phelps
Christopher Phelps
Sole Practitioner
Master Degree
1,180 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