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.
