I personally paid my deceased uncles back taxes. How do i put that on my taxes?

[mjncarl]

My uncle passed in May of 2024. he had back taxes from 2017 in the amount of 21500. I cashed out my 401k and paid them. How does that work on my taxes?

[VolvoGirl]

Sorry that was just a gift you made.  It doesn't go on your tax return.  You will have to report and enter the 1099R for the 401K and pay taxes on it and a 10% early withdrawal penalty if you were under 59 1/2.  

[xmasbaby0]

Oh----so sorry----but unless your name is on the deed or the mortgage, you cannot deduct paying his taxes.  Did you inherit a house from him----post details if that is the case.   Were you the executor of the estate?   Did you seek legal advice?    Did someone tell you that you were personally responsible for his debts?

 In effect,  it sounds like you gave a gift--even if it was a post-humous gift.   Gifts to family members are not deductible.    And you used your 401k?    If you are under 59 1/2 you are going to pay a 10% early withdrawal penalty, plus ordinary tax.   You will receive a 1099R to enter on your tax return.

To enter your retirement income, Go to  Federal> Wages and Income>Retirement Plans and Social Security>IRA  401 k) Pension Plan Withdrawals to enter your 1099R.

[VolvoGirl]

Uh, what back taxes did you pay?  IRS, State, or property tax  etc.

[Opus 17]

Generally speaking, income or business taxes died with him, you did not need to repay them.  His estate has to pay any taxes before the rest of the estate is distributed to the heirs, but if there is not enough in the estate to cover the taxes, then they just don't get paid.   If he has an estate that was divided among his heirs (other family or whomever), his final expenses should have been deducted from the estate before the rest was distributed.   You would have to try to recover the taxes from the heirs who benefitted by your action.  If there is no estate, then you should not have paid the tax and there is no way to get it back.

If you paid back taxes on land or property that you inherited (you now own it), that is deductible in the normal way of deducting property taxes.  If you paid back taxes on inherited property that was sold and distributed to the heirs, the taxes should have been deducted from the sales proceeds before the leftover amount was distributed.

You may need to see an attorney. 

[mjncarl]

According to the IRS, the back taxes could not be waived on death since they were from 2017. At that point we were notified that they would have 10 years in which to find the next of kin or head of estate and  the back taxes would be their issue to pay. We chose not to let them have another 10 years of accrued and compounded interest in which we would then be liable for as well. I am also a 100% disabled veteran so my early withdrawal will not be taxed.   Thank you for you're time