Level 6

Question

personal 1040 and 1041

Forum|Forum|4 years ago
August 17, 2021
3 replies
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Client passed away in 2019. We do not do other members of the family just his.

He passed in Sept of 2019 and they closed out and sold his invesments in Oct 2019. They just now brought in his information. They never opened an estate or applied for an estate ID# all transactions were then reported under the clients social security number. I know in theory I should be doing a 1040&1041. I guess I am asking do I ask them to go ahead and apply for number and report as it should be although irs will be matching to ssn I would think they would see he is deceased and needs 2 returns. we are not talking about alot of money about $3200 in cap gains and 4000 in dividends. I know this will require them to amend their returns. I just don't think they knew what they were suppose to be doing.

thx

Michele

Lacerte Tax

This topic has been closed for replies.

IRonMaN

Level 15

Sounds like you already know the correct answer. Yes, a tax ID number should be obtained and a 1041 should be prepared -------------------- and if the family took the money, some amended returns will need to prepared.

Slava Ukraini!

joshuabarksatlcs

Level 9

Ironman just wanted to be prepared in case I run into you - do you pronounce it tomaitoes or tomahtoes?

I come here for kudos and IRonMaN's jokes.

IRonMaN

Level 15

They are tomaitoes to me ------------------- I never have personally come across someone that pronounced that as tomahtoes, but I do lead a sheltered life.

Slava Ukraini!

George4Tacks

Level 15

While you meet with them have them complete a ~~W-4~~ ~~W-7~~ SS4 and do the application online https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

You will get the EIN at the end of the process.

A related question is whether the income of the 1041 was distributed to the beneficiaries and if so, when.

Answers are easy. Questions are hard!

T

Terry53029

Intuit Community Champion

@George4Tacks Do you mean W-7

George4Tacks

Level 15

Of course I do, I was just seeing if the forum was being alert.

Answers are easy. Questions are hard!

BobKamman

Level 15

If they didn't open an estate, how did they close out the account? Was it a "transfer on death" account? If so, wouldn't the transactions after death be reported on the beneficiary's return directly, and not on a 1041?

How did the $3,200 in capital gains come about? Was that for the entire year, or just after his death? Are you taking into account stepped-up basis?

M

micheleAuthor

Level 6

They did not transfer it at death. They just sold everything and used his ssn# and reported everything under his number. They should have done a transfer to them then sold the investments under their id. or gotten an ein for an estate and sold them thru there. It's always lovely when they don't consult anyone before they jump in and just do and of course they won't want to amend their returns but to me right is right and wrong is wrong.

thx

Michele

George4Tacks

Level 15

It is only the prepares job to point out errors on previous returns. You can not make them do the right thing. Bottom line on what you describe is that there was no intentional fraud and the net tax is essentially the same. Consider letting lying turtles lie and go on with the next year.

Answers are easy. Questions are hard!

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