Tax Law (Questions About Taxes)/inheritence tax/1099

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Question
My grandmother died in 1990 to which my father and Aunt received inheritence. In 2012 Exxon Mobile contacted my father with additional stock of my grandmother's to which he received and cashed in for 17,000.00.  He was at that time unable to locate his sister as they are estranged. He did however leave messages for her children regarding the stock.  In early 2013 his sister contacted him and he sent half of the 17,000.00 to her in the form of a cashiers check.
My question is 2 part:
First what kind of taxes does he have to pay on this money as he did receive a 1099 form.?
Second how does he handle or recoup any taxes paid due from the money he sent to his sister? Since it was a different year?
My father is elderly and any help you can give us would be appreciated.

Answer
Lori,

Thanks for your question.

The tax would be the difference in his basis, which is the fair market value as of date of death, and the proceeds from the sale.  This would be at the capital gain rate.

He can pay the tax on the full amount and ask the sister to pay him her half. That would be the easiest solution. Alternatively, he could issue her a 1099 for her half.

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

Experience

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.

Organizations
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.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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