Estate bank account

[vze56v6x]

When my mom died all her bank accounts were joined accounts with me except one account that had under $1000. Because of this all bank accounts except for one had my moms removed. I just didn’t get around to going to the bank and removing her name from the one account since it was a joint account to begin with.

For the home since she passed I simply paid for all expenses from the bank accounts that we had joint. I didn’t deposit money into an estate account and pay out that way.

the estate account only had this small amount of money which I withdrew and used it towards expenses.

i am the only child and only person who inherits the home etc. 

we just sold the home in Feb and the funds were deposited directly into my account not the estate account.

my question is does any of the above matter?

i assume what I paid out from the joint accounts is just considered expenses as part of the estate and any rent I collected from the house and deposited into my checking account used with my mom at one point is also estate income. It shouldn’t matter the source  of the funds as long as I report them correct?

[Anonymous_]

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@vze56v6x wrote:

my question is does any of the above matter?

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It particularly does not matter if the accounts were all joint with rights of survivorship.

Such accounts pass outside of the estate and you acquired them in your own name by operation of law.

[JillS56]

It depends.   For the most part yes as long as you report everything correctly, then you should be okay.   I would recommend that you put all deposits and pay all expenses of the estate from the estate account.   It is not a good idea that you put into different accounts.

Another to keep in mind, even though you are the only child, did your mother have a Will, was your name on everything she owned as a joint owner.   

My one concern is on the house you sold, was this in your mother's name only, or were you a joint owner with her?  How the house was held, would make a difference in how the sale should be reported for tax purposes.   If you were a joint owner on the property, yes the property automatically converted to you only, but then when you sold this you may have to report this as a possible capital gain.   If it was not your primary home and it sounds like it was rented, then you would have to report this on your return as the sale of business property (since it was rental property).  I would seek advice on reporting this, there are a lot of questions that should be answered to determine the proper way to handle the proceeds from the sale.   It is not considered inheritance if your name was on the home.

If she did not have a Will and you were not a joint owner on all of the property with your mother, you should really seek legal advice.   There are intestate laws (someone who dies without a Will).   

I cannot give you advice on what to do, but what I can say is I would seek out a professional to answer your questions before completing your taxes.

[vze56v6x]

Thanks

my mom did have a will which stated I was the executor and inherited everything with the exception of money she was giving her grandson. 

the house was never in my name always in hers and was sold as part of the estate

as this point it’s too late to put anything into the estate account because when my mom died we gave the tenant a new lease and had her make the checks out to me. I deposited the checks and paid all expenses from that and other joint accts I had with my mom. There was no profit at all since we were collecting less than we were paying out.

i planned to report the sale of the home as part of the estate and the proceeds of the sale as an inheritance on schedule K on my personal 2022 taxes

i feel hiring a professional would be more work than anything but I may seek out speaking to someone to just ask questions.

i asked here because I wanted to understand the basics.

[ErnieS0]

Your basic understanding is correct. If the house passed into the estate and was sold there, file a Form 1041 estate and trust income tax return. 

Income from the estate will be passed to your via a Schedule K-1.

Your rental appears to be a not for profit activity if you intentionally charged less than your expenses. In that case, you would not be able to claim a loss but can claim expenses up to income to zero out. It would depend on the facts and circumstances of your situation.. 

[Anonymous_]

The rental would not be a not for profit activity merely because the rental expenses exceed the rental income (which is the case with a very large percentage of rental real estate activities).

[vze56v6x]

Why would the rental be not for profit.

when my mom was alive she received social security plus the rent and that is what was used to pay for the home expenses ( property taxes utilities etc)

when she died we only had the rent which often wasn’t enough and I would have to use personal money to pay. A lot of her utilities were directly debited so I would just make sure my account had the money so when they were paid the payments went thru. All accounts were jointed except for one which has less than $800 and was disbursed to me the executor and deposited into my account and was used to pay towards expenses (not any one specific expense)

since I used personal money to pay for everything would I then not need to report any of those expenses and rental income on the 1041? If yes then what else would I report. I feel those are the only things I have to report. 😆

[Anonymous_]

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@vze56v6x wrote:

Why would the rental be not for profit.

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It is almost certainly not a not-for-profit rental.