Hello - As Administrator of my brother's estate, I'm working on his taxes. He was transitioning to early retirement just prior to his sudden death in January 2024. In July 2023 he had taken $200k as a lump distribution from his Traditional IRA. (He was just above the 59.5 year threashold to do so without penalty.) As is apparently typical, taxes on that $200k withdrawal are due 4/15/24. My brother had gifted the $200k to his godchild (now an adult), signing a Gift Affidavit. The money was intent to be ulilized in what appears to more or less be a hand-shake partnership on a retirement home in northern Wisconsin. I understand that $17,000 is the annual limit amidst a lifetime exclusion of $12.92 million. His estate is worth substantially less than the lifetime exclusion . He was single with no children. Estate is now in probate. Point being, his potential for lifetime exclusion ends forever with the filing of his 2024 taxes. All this said: Must I still document this $200k gift. If so, my search for Form 709 or any reference to this sort of Gifting within the Step-by-Step format has come up empty (2023 Home and Business software.) If I must document, how can I trigger Turbotax to initiate the questions and/or the proper form?
Related: He will owe federal taxes approaching $50K (he had other distributions which were not part of the gifting). Timing of probate is unfortunate. We will need to pay his tax bill from his IRA but we may not yet have time to obtain the legal access to do so. File an extension and pay the penalty for late payment? Or might there be precedence for these types of circumstances? (Okay... I know it's the IRS so maybe everyone will get a good laugh on me. (Your welcome) 🙂 Thank you for your time thus far.
You'll need to sign in or create an account to connect with an expert.
You do need to file the Form 709 for his gift. You can use About Form 709, United States Gift to file the form. It is not part of the personal tax return so it is not in the program.
You can file the return on time and pay when you can. You can ask for an abatement of the interest and any penalties based on the extenuating circumstances. I have found the IRS very difficult to deal with regarding deceased taxpayers and wouldn't expect much help. See Penalty Relief for Reasonable Cause.
I am very sorry for your loss and wish you all the best.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
yaredcastro
New Member
randomperson5
Level 2
Allumjr
New Member
Eohx211
New Member
KatieC1
Level 1
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.