Filing taxes for a deceased parent

[kiakitty]

I was the poa for my mother who passed away in January 2022.  I split her assets between myself and my brother.  How do I report that on her and my taxes?

[Corrlich44]

Hi kiakitty,

Great question!

If you and your brothers are beneficiaries or heirs, you will not report any of the distributed assets on either of your tax return, unless they were sold for more money than the inherited value of the asset.

As far as your mother's tax return is concerned, only the income she earned or the deductions she incurred for 2021 or 2022 would be reported on a final personal tax return for her, then you would prepare an estate tax return to account for all remaining assets at death and undistributed income, of which it all may be subject to exclusion or exemption once completed and no federal income tax would be paid.

You will have to assess the state separately.

[kiakitty]

In distributing her assets, I had to sell stock and then distribute to myself and my brother.  Will I need to report any profit made when selling stock on my mom's tax return?  Will I have to include on her return how much was distributed to me and my brother?

Thank you.

[Corrlich44]

That is a great question.

Who's account were the assets sold?  Your mom or your account?

All assets sold from inheritance are considered Long-Term Assets.

If you sold the assets within her account, that gain or loss is reported on her tax return.

If you were distributed the assets and they were sold, it would appear on yours and your brother.

[kiakitty]

The stocks were sold from my mom's account then I split all of the monies from her account between me and my brother.  So I know I will receive a statement from the broker indicating any stocks which sold at a profit at the end of this year.  Will I include those profits on my mom's return?  Then will I and my brother have to report all monies received from this distribution?  Then as a whole will I and my brother have to account for monies we received from her checking account as well?  Thanks.

[Corrlich44]

If all assets were sold in your mother's account, the Form 1099-B you receive for your mothers benefit, would be used to prepare her annual tax return.

Beneficiaries or Heirs never report the receipt of any distribution, unless that long-term asset was sold.