With my mom dieing this month, what do I need to keep to get her taxes done?

[K M W · Accepted solution]

I am sorry to hear of your mom's passing.  As she passed in 2024, there may be a final tax return that should be filed for the income received in 2024 prior to her death. However, that income tax return is not due until next year (April 2025 for income earned in calendar year 2024), and there is not an option to file the final individual tax return earlier than the standard filing season.

Depending on the situation, she may not meet the requirements to have to file a return for 2024. The filing requirements are based on age, filing status and amount of income. If there was not a lot of income received prior to her passing, there may be no filing requirement for a tax return (you would want to check both federal and state filing requirements).  However, be aware that, if there was any income that had federal or state withholdings, you may want to file a tax return even if no legal filing requirement to receive a refund of the withholdings.

Other than the final individual tax return, there may be a trust and/or estate tax return due if she had a trust and/or if there is income received in her estate.  Those returns, if needed, would be handled by the trustee if there is a trust, or the fiduciary if there is an estate.

[easmitty]

Sorry, I am the trustee for her living trust.

Is the $ for the estate sale, car and home considered income for her?

Pamela [removed]

[email address removed]

[K M W · Accepted solution]

Generally speaking, any assets that your mom owned would have a "step up in basis" when she passed - meaning the adjusted basis to her estate will be the fair market value of the item on the date she passed away. Therefore, when these assets are sold at an estate sale, they rarely generate income - as the income would be the difference between the fair market value on the date she passed and the price it sold for at the estate sale, which generally is equal to or less than that fair market value set.

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The same would be true for her home - if it transferred to her estate, it would have a step up in basis to fair market value on the date of her death - and therefore generally does not create any income when sold.  

Of course, that could change somewhat if the assets are held for a period of time and appreciate in value, then sold for more than fair market value on the date of passing. Or if the house sold for more than what that value was established at.

Note that, in the event there is income that is generated after the date she passed away, that income would NOT be reported on her individual income tax return.  Any taxable income that may be generated in the Estate would be reported on an Estate Tax Return, Form 1041.