So when they passed away (one Dec Sept 2020 and one Dec 2020, our lawyers said to open a brokerage account in the estate name and put all of their assets in there. This included several bank accounts, many stocks and cash. So that's what we did. Because of Covid and absolutely no legal will with my parents, everything took a long time in probate. By 2023, all the stocks were sold and everything deposited into the brokerage account. Again we were told there would be no taxes for either of us when we inherit this money.
(Side note, there was no way to find the cost basis of any stock as my parents owned them for decades, some 40+ years)
In March of 2023, the lawyers told us to divide the assets. Since I was paying all the estate and house bills since their 2020 deaths, I took what I paid out first over those years, and then divided the rest up 50-50 to my sibling. (It was nearly $150,000 in bills that I paid) So to make round numbers, let's say I received $1,075,000 and they received $925,000.
Neither of us paid any taxes on any of that money, nor claimed it as income per our accountant and lawyers. For any year. They said this was tax free inheritance.
When my brother took the estate taxes to H&R Block for year 2022, they didn't say anything about needing to file final year taxes. So we thought we were done with everything.
Now all of a sudden we find this $2900 broker 1099 DIV statement for two months in 2023 in the estate name. So this $2900, which is in the estate name, is what we're dealing with now.
We no longer have a relationship with the lawyer nor accountant as they were insanely expensive and we could not afford them now. We only used them at the time because we figured the estate would be paying for them in the end, so why not get "good" ones. Recommended from relatives of course. Wouldn't do it again.
