Serious question on income tax for an estate

Status
Not open for further replies.

dividedsky260

New Member
My sister and I are confused about what to do regarding one portion of the taxes on our mother's estate. Essentially, all of her debts have been paid and recently the estate taxes have all been filed and paid via our attorney, so we have no concerns there.

However, part of the probate assets of the estate equal roughly $130K as a result of "divorce decree settlement" that she had been receiving from our father after their divorce. When they divorced 2 years prior to her death, their divorce agreement included him paying her monthly as a "consultant" or employee of his small business. So, she received (and now her estate does) monthly checks from my dad, with about $130K left for him to pay over the next few years as part of their divorce settlement. The settlement states that the monthly checks must legally be paid to her regardless of who passed away first.

Of course, my sister and I being the beneficiaries of her estate, now have access to this money. The monthly checks are written to her estate, and deposited into the estate account. We have both transferred money from the estate account to our own personal accounts as beneficiaries.

How do we approach taxation on this? Since her estate taxes are finished, do we simply include the money as our own personal income and add that to our income for personal taxes? Or, is there no need to report this since estate taxes have already been paid on this money?

Any insight would be greatly appreciated. We are talking probably about $7k-$10k each that we've taken over 2007 from the estate account into our personal accounts since all estate taxes, debts, attorney fees, etc. have been paid for. Thank you in advance.
 
Last edited:
Status
Not open for further replies.
Back
Top