Nan, EA in LA wrote:

- quote -

As this is IRD, and assuming that the right to any income of
the decedent belongs to the three sons, and as the funds
were sent directly to the three sons, then each son has to
report the social security income on his separate return and
pay tax on up to 85% of the benefit in the same manner any
other SSA recipient would pay tax.

Even if I'm wrong up above, then the income belongs to the
estate of the decedent. It would wind up on a 1041 for the
estate with K-1s distributing the income to the three sons.

Either way, the three sons wind up with the income.

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"tobe" <ybotkaSPM[at]cinci.rr.com> wrote
- quote -

Umm...that's not quite how IRD incomes work.

In any event, it might be that the SSA benefits
wouldn't have been taxable to mom to start with.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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"Nan, EA in LA" wrote

- quote -

Isn't this "Income with respect to a decedent" (i.e. income
due to a deceased person, arriving after death) and
therefore included in the final income tax return for the
deceased person? If so, then any tax due is due on the
deceased person's final (or amended final) return, and the
remainder is divided among the beneficiaries as
income-tax-free inheritance (of course, after any estate
taxes are paid).

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Nan, EA in LA wrote:

- quote -

Son # 2 has it right. The 900$ was his mother's property
but SSA as a matter of convenience distributed the checks
pro rata, hence none is income to the check's payee.

ChEAr$,
Harlan

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Decedant mother was owed $900 in Social Security for 2005.
SS sent 3 checks for $300 to each of the 3 sons. Son A
insists that mom's trust gets the income and A's share is
tax free as inherited money. Son B says his $300 is just
plain inherited and tax free as the 1099 had his name but
Mom's SS #. Son C, my client, is the trustee and will
take my advice (taxable to him on his return) and wants to
know if he should inform A and B that they have to amend.

I loooooooove family squabbles!

Nan, EA in LA

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >