My father died earlier this year and I am the beneficiary. I received life insurance and got a 401K that I closed out. I know life insurance is not taxable. My problem is I don't know if my father has filed taxes in the past or not. He lived in LA and had little to do with his family. I believe that he might also owe back child support in WA. Will that affect me?? How do I find out??
2007-12-30 02:12:00 · 8 answers · asked by funky_munkey924 1 in Business & Finance ➔ Taxes ➔ United States
Daddy had no estate or anything. He had nothing in his name. Does that matter?
2007-12-30 02:26:22 · update #1
If you are the executor you'll be the one to file his federal tax return - file it just like he would have, but show "final return" on the top. If he has a refund coming and owes back child support, his refund will be taken for that if he has one and if the paperwork has been filed to take it. You can ask the IRS if there's an offset filed for his refund.
You'll have to pay taxes on the 401K that you inherited and closed out. And his 401K is an estate even if he didn't have anything else. If he owed any bills, you'd most likely have to pay those out of the 401K money.
Sounds like consulting an attorney would be a real good idea for you. They can guide you in what has to be done.
2007-12-30 03:51:33 · answer #1 · answered by Judy 7 · 1⤊ 0⤋
The life insurance goes to you as a beneficiary and is not normally taxable. Any other assets that your father had at the time of his passing are those of his estate his "estate" regardless of any formal arrangement that he may have had. The 401K may have been left to you as a beneficiary but any opinion I would have is only a guess as I have not reviewed that paperwork. Any other assets remain in your fathers estate. If there was no formal arrangement like a will or trust things will get a little complicated. Having been the beneficiary if his insurance policy does not make you responsible for any thing. If you were the beneficiary of his 401K that does not make you responsible for his estate or any debts the estate may have. If you are the executor or trustee for his estate you should have agreed to that at some point before his passing. You would be well advised to seek the advise of a professional before you do anything.
2007-12-30 02:43:48 · answer #2 · answered by ? 6 · 1⤊ 0⤋
As far as filing the tax return is filed just as he would be doing it but then Write Deceased On the return, check the first source below its short and easy to understand. If you open the book for a 1040 it should say that in the first couple of pages also.
Also the IRS's web site is pretty good for use with its search.
As far as whether he filed past years you can ask the IRS, because it is not him calling they may (hopefully) request it in writing though by phone I would atleast expect they will probably give you a yes or no, as to whether they had been filed. If they are available, having last years return might help you out, and may even bring your attention to something you don't know, like if he also had an IRA somewhere, or property you don't know of ect. As far as State returns requirements they will normally be the same as the federal return.
If there is No/ sizable estate to deal with and you normally do your own returns: do it your self Its easy,otherwise just go to your regular tax service and this might be the better if your not use to doing California returns.
Remember It is HIS TAX liabilty, that can only be taken from his assets left (the INSURANCE IS YOURS), If there is a return coming then its yours also, just file the one additional form required as stated in the links below.
Back Child support is a seperate issue it is a liabilty that he had, you would have to check the associated state laws. But this also is HIS Liabilty not yours. Nothing should come from your pocket, only from his assets left; Including paying someone to do the returns/filings for you and that should be concidered as coming from his assets.
2007-12-30 03:26:39 · answer #3 · answered by john k 6 · 0⤊ 0⤋
He left assets which must be properly administered through a probate proceeding if he did not have a will or living trust. You will need to contact an attorney who handles estates to do it right. This is not a do it yourself job. I hope you haven't spent the money because your father's creditors, if there are any, come first.
2007-12-30 03:44:02 · answer #4 · answered by Anonymous · 1⤊ 0⤋
Yes, he did have an estate! That 401(k) was part of it. The funds that were in it can be used to settle any debts of the estate, including back child support. Since you cashed it out for your beneift, you CAN be tapped for any debts up to the amount of the funds that were in the 401(k)! If someone puts a "nose" on that money trail, they WILL come looking to you for it. A POD or TOD designation on an account does not exempt the funds in it from either estate taxes or attachment of them for debts of the estate.
You need to consult with an attorney who specializes in estates and estate taxation.
2007-12-30 02:42:13 · answer #5 · answered by Bostonian In MO 7 · 2⤊ 1⤋
First, the life insurance money is yours and does not come under your dad's estate.
If he owed money for child support or other bills, that debt does not pass on to you. However they must be paid by his estate before it is probated.
2007-12-30 02:25:08 · answer #6 · answered by artgrantz 5 · 0⤊ 0⤋
I am sorry for your loss. In the year of passing, the surviving spouse files her last joint return. She reports all of her income and all of his before passing (SSI isn't taxable). She cannot file as a widow in the year of passing. She can also not file as a widow in the future since a qualified widow is one who has at least one dependent and has become a widow in the last two years. She will file single in all of the years after the year of passing unless she gets married again of course.
2016-04-02 02:01:39 · answer #7 · answered by Anonymous · 0⤊ 0⤋
I would not depend upon any answers you receive here. You need the help of a tax professional.
2007-12-30 02:15:14 · answer #8 · answered by Anonymous · 1⤊ 1⤋