Tax Law (Questions About Taxes)/1099-INT

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Question
My mother died  December 1 1992. In 2012 I found US Savings Bonds in her and my father's name. My father died on June 23, 1994, I was the executor of his estate. I was able to cash the bonds because I had death certificates and executor ship. Interest on the bonds was $16,635.40. The bank sent me a 1099- INT made out to my my mother's estate with the estates federal ID #. Can I submit a  
1041 for her estate and pay any taxes  required or do I have report this as interest on my taxes since I was the sole beneficiary?

I also sold the family home in 2012. The property was transferred to my sister and I when my father died in 1994. My sister had lived in the house until she died on January 28 2012. We have shared taxes on the property since 1994 but I lived in another state. I sold the house on September 9,2012. Two checks were made out half to me and the other half to my sister's estate.
I received a 1099-S for my half of the sale. The total sale was $125,000. Do I have to report my half.

Answer
Joseph,

Thanks for your question.

On the interest, since the 1099-INT uses the Federal ID number for the estate, you will need to file a return (Form 1041) reporting that interest.  You can choose have the estate pay the tax or to pass the income on to you and you pay the interest on your return.  The latter is usually the better route to choose, as you would likely pay less tax by passing on to your return.

Yes, you need to report the sale of the house on Form 8949 and Schedule D.  Your basis in the house was the fair market value when you inherited it in 1994.  Subtract your half of the basis from your half of the sale proceeds to determine your taxable gain or loss.

Hope this helps.

John Stancil, CPA  

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

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I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

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DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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