All Posts

@shrivatsk , for 2024  tax year -- federal you can file MFJ  ( that does mean that your spouse's income is also taxed by the Fed.  Or you can file  MFS and leave her income out ( if she is NRA ).   For CA, your income is CA sourced  but her is not --- and her residency starts when she settled/entered CA. Are you a US person ( citizen/GreenCard / Resident for Tax Purposes )?  How about her ?   Is there more I can do for you >

To get the maximum exclusion of gain when selling your home you must satisfy all of the following conditions. You owned the home for 2 years out of the 5 years preceding the sale. You lived in the home as your primary residence for 2 years out of the 5 years preceding the sale. You did not claim an exclusion of gain for the sale of another home within two years preceding the sale. See IRS Publication 523, Selling Your Home, for details and exceptions.  

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. 

https://ttlc.intuit.com/turbotax-support/en-us/help-article/import-export-data-files/save-2021-turbotax-online-return-pdf/L8dHfRkpT_US_en_US?uid=m7e64td0   If you used desktop download software, the tax return is stored on your own hard drive.

Turbotax does not handle tax audits/notices. one a return is accepted Turbotax is out of the picture. your options are to 1) if you paid for audit defense when you did 2021 contact them or contact them now  see this link. switch to state notice then click on the California link https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-audit/turbotax-audit-support/L6AcMoNFD_US_en_US  2) handle it yourself - we can't see the notice so don't know if advice could be offered on how to respond, 3) hire an outside pro 

Don't quite understand what you meant by "Can I take the numbers from what my personal accountant did in 2023 and plug into TurboTax with this additional income? "   Based on what little I know about the situation, I believe all you need to prepare the final 2023 Form 1041 is the $2,900 1099 form and the fees that the estate paid the accountant and lawyer in 2023.  None of the amounts on your person 1040 is needed for the 1041.   If the estate has any taxable income after deducting the professional fees and the $600 exemption, TT Business will produce a Schedule K-1 for each of the beneficiaries, listing their pro-rata taxable income.  This Schedule K-1 will be needed by your personal tax preparer to amend your 2023 Form 1040.  Nothing else.  Hope this is clear.

You mentioned the estate was "closed" in March 2023 and that you have had a lawyer and an accountant involved.  With that in mind, assuming you have an ongoing relationship with your accountant, s/he should have inquired about preparing a "final" 2023 fiduciary tax return, Form 1041, given the size of the estate.   I assume the 2022 Form 1041 was NOT marked "Final"?   Your lawyer/accountant/financial adviser were not exactly technically correct when they said none of the money you and your sibling received was not taxable.  The corpus (principal) is not subject to income tax, but the income is.  In the "Final" year, the estate's income is always distributed to the beneficiaries and taxed at the heir's level.     I have never used the TurboTax Business software.  But I'm quite confident that TT Business can handle such a simple 1041 tax return.  If the Estate paid the lawyer and accountant their fees in 2023, then the estate should be able to deduct those fees on the 2023 1041 tax return.  Who knows, that MAY mean no net income for the estate and no income to be distributed on the K-1.  Good luck!

Thank you xmasbaby!  Your human intelligence provided the exact information I needed.  I called TurboTax.  Total time to fix my problem was 14 minutes, including time spent answering the chatbot's questions and waiting for an agent to be available.  This is how it should be.     I have used Turbotax Download for over a dozen years.  I've used the same email address with my Intuit account 2019.  I am not a free online filer, but every time I log into my account it wants me to answer a few questions in order to start filing my taxes.  According the very helpful customer service agent I am not alone with this problem, and she does not know how to correct this mistake in my Intuit account.     This information about me is beside the point of my rant.  Intuit's AI chatbot is frustratingly primitive.  After asking the same series of questions three times and receiving the same user response "Give me the phone number for customer service."  it should be programmed to say "I don't seem to be answering your question.  Let me connect you with a customer service agent."     Good customer service  will keep people coming back.  Bad customer service will drive them away.     I don't know if you are an employee of Intuit or a dedicated volunteer, but thanks again.  I do not look forward to the day when companies turn all their customer service over to AI chatbots.  

When you say "filing quarterly", I am assuming you mean quarterly estimated taxes and not quarterly payroll tax returns for employers who have employee withholding.   We pay quarterly estimated taxes to avoid "underpayment penalties".  To do that, a taxpayer can generally pay in 90% for his/her current year's total tax or 100% of the previous year's total taxes via Quarterly estimated taxes and/or withholding (110% if the previous year's Adjusted Gross Income is over $150,000).  For Calif, if the taxpayer's income exceeds a million dollars, the 100 or 110% safe harbor is not available.  So do watch out for any specific state tax law requirements.   The easiest and safest way to pay taxes is using ACH Debit.  For the IRS, use www.irs.gov.