Do we have to file taxes for our deceased grandmother?

[Lorix2]

Hi,

My grandmother lived in MA. My aunt is handling her estate from Illinois.

She keeps telling us that she's prevented from putting the house up for sale, because she needs to file the state and federal taxes for her that weren't filed while she was alive. The house is empty and costing tons of money per month to keep running, she died in 2008.

Does anyone have any experience with this?

Thank you

 

[golfgal]

You need to see an accountant. She might have to file them and she might not-did she have any taxable income? It isn't really a yes or no answer.

 

[Lorix2]

she lived on her retirement and social security.

 

[agnes!]

I think that you'll need to hire an estate lawyer local to your grandmother's property (in Massachusetts), for some advice. From your question (empty house costing $$$ to run) it sounds like you might have some concerns about the the Estate being drained by a possibly needless obligation & also maybe about your grandmother's Will? At the very least, it might be time to think about taking a trip to Massachusetts... get some local legal advice, maybe take a look at your grandma's house & make sure it's in good shape.

I'm just warning you now, estates can do funny things to families...

agnes!

 

[PatsMom]

I have to agree with checking with an attorney or accountant. Did anyone file 2008 tax returns? If your grandmother was required to file, returns probably should have been filed for the deceased taxpayer with income, etc through the date of death. Then it becomes an estate and the tax rules are different. The estate most likely may have to file 2008 and 2009 tax returns. And since it is still open a 2010 tax return.

But as someone already said, estates can do funny things to families and questioning the executrix can cause problems.

 

[RadioNate]

I'm no tax account but I'm fairly certain that a 2008 return would be necessary. If she was still earning income in 2009 under her SSN, I would expect that she would need to file a 2009 return too.

My grandmother passed in Dec 09 and we (the estate) are required to file a 2009 return on her behalf. The way my grandmother had her estate set up (no property and all monies POD) I don't believe we will have to file a 2010 return as everything transferred upon death.

Depending on when assets were legally transferred or the will probated, it is possible that your grandmother may need an 09 return but that would be a question for the estate and a tax attorney.

ETA - I think I misread the original question. Are you saying that your grandmother failed to file the appropriate taxes while she was alive therefor owing back taxes and possible penalties? This is an entirely different can of worms and I don't think your grandmother's assets can be distributed until that matter is settled. If there is IRS debt to be payed the estate may be responsible and may need to use the house for 'payment.'

 

[DebbieB]

I was the executor of my mom's estate. I don't know about MA but in PA you have to file an estate tax return to the state. We had to list all the assets in the estate (including an appraisal on the house) and paid like a 4% tax. I was over $4,000, killed me to pay it.

 

[Cheshire Figment]

For 2008 there will bne two (or possibly three) returns.

1. Is a regular Form 1040 which covers income from January 1 through the date of death.

2. Is a Form 1041 Fiduciary return which covers income received by the Estate after date of death until the end of the year. If the Estate was not closed in 2008, a 2009 Form 1041 is also required.

3. Is an estate tax Form 706 which is for assets and liabilities of the Estate. This normally requires a lawyer or trust specialist.