Who's responsible for taxes/1099-S? - Posted by Jimbo

Posted by Bruce on January 22, 2001 at 14:07:31:

Yes, if estate is under 600,000 - no estate taxes.

Who’s responsible for taxes/1099-S? - Posted by Jimbo

Posted by Jimbo on January 22, 2001 at 11:25:39:

Seller is personal representative for his mother’s will/estate. I am buying his mother’s house from the estate. When we settle, the title company will issue the estate a 1099 for the contract price. He and his siblings are inheriting the proceeds of the will. The property appraises at 50K, the contract is 48K, and net proceeds to the seller is 48K on the 1099-S. Since his mother’s estate is minimal and probably won’t owe estate taxes, the net proceeds to the estate (and therefore the seller) is not taxable, right? The reason I ask is that we increased the purchase price so I can get some cash from the seller at closing. The 1099 will show the estate getting 48K, but the estate really gets less than that after the estate provides some cash back. So, the bottom line is that it really doesn’t matter what the 1099 is for because the estate (and therefore the heirs) won’t owe any taxes. Am I right on this?