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Who deducts donation of property of deceased person?
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qguy
May 9, 2013, 1:30:05 PM5/9/13
to
My son died intestate, so we (parents) inherited his estate (under $150K).
Calif law applies.
In settling the "small estate" (informally), I donated his personal
property -- furniture, clothing, books, etc. The property was donated
within 2 weeks and in the same calendar year of my son's death.
On which income tax return can we deduct the value of the donated property:
my son's, ours or either one (our choice)?
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Calif law applies.
In settling the "small estate" (informally), I donated his personal
property -- furniture, clothing, books, etc. The property was donated
within 2 weeks and in the same calendar year of my son's death.
On which income tax return can we deduct the value of the donated property:
my son's, ours or either one (our choice)?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
Pico Rico
May 9, 2013, 2:18:34 PM5/9/13
to
"qguy" <qguy...@hotmail.com> wrote in message
news:kmgljt$gj$1...@dont-email.me...
> My son died intestate, so we (parents) inherited his estate (under $150K).
> Calif law applies.
>
> In settling the "small estate" (informally), I donated his personal
> property -- furniture, clothing, books, etc. The property was donated
> within 2 weeks and in the same calendar year of my son's death.
>
> On which income tax return can we deduct the value of the donated
> property: my son's, ours or either one (our choice)?
>
yours. Your son died before it was donated, so his tax year ended.
> Calif law applies.
>
> In settling the "small estate" (informally), I donated his personal
> property -- furniture, clothing, books, etc. The property was donated
> within 2 weeks and in the same calendar year of my son's death.
>
> On which income tax return can we deduct the value of the donated
> property: my son's, ours or either one (our choice)?
>
alternatively, I suppose it could be deducted from the estate's income tax
return (not estate tax return) assuming one was filed.
Sorry for your loss.
qguy
May 9, 2013, 4:25:14 PM5/9/13
to
"Pico Rico" <Pico...@nonospam.com> wrote:
But I started to have doubts because the donation occurred before the 40-day
waiting period that is usually required for a "small estate" transfer of
personal property (Calif Probate Code sec 13100 et seq).
So technically, I think I donated the property on behalf of the estate (as
the estate personal representative), not my own property. Therefore, it was
not clear that I can claim the deduction for myself.
That left the possibility that it should be claimed on my son's 2012 income
tax return (the death was in Nov 2012, and the donation was in Dec 2012).
Or a 4th possibility I just thought of: no one can claim the deduction. As
you say, not my son because the donation occurred after his death. Not me
because perhaps it was not my property at the time of donation.
Do those additional facts alter the answer?
> "qguy" <qguy...@hotmail.com> wrote:
>> On which income tax return can we deduct the value of the donated
>> property: my son's, ours or either one (our choice)?
>>
>
> yours. Your son died before it was donated, so his tax year ended.
That's the way I thought about it, and that's the way I handled it.
>> On which income tax return can we deduct the value of the donated
>> property: my son's, ours or either one (our choice)?
>>
>
> yours. Your son died before it was donated, so his tax year ended.
But I started to have doubts because the donation occurred before the 40-day
waiting period that is usually required for a "small estate" transfer of
personal property (Calif Probate Code sec 13100 et seq).
So technically, I think I donated the property on behalf of the estate (as
the estate personal representative), not my own property. Therefore, it was
not clear that I can claim the deduction for myself.
That left the possibility that it should be claimed on my son's 2012 income
tax return (the death was in Nov 2012, and the donation was in Dec 2012).
Or a 4th possibility I just thought of: no one can claim the deduction. As
you say, not my son because the donation occurred after his death. Not me
because perhaps it was not my property at the time of donation.
Do those additional facts alter the answer?
Stuart Bronstein
May 9, 2013, 9:33:54 PM5/9/13
to
"qguy" <qguy...@hotmail.com> wrote:
> "Pico Rico" <Pico...@nonospam.com> wrote:
>> "qguy" <qguy...@hotmail.com> wrote:
>>> On which income tax return can we deduct the value of the
>>> donated property: my son's, ours or either one (our choice)?
>>
>> yours. Your son died before it was donated, so his tax year
>> ended.
>
> That's the way I thought about it, and that's the way I handled
> it.
>
> But I started to have doubts because the donation occurred
> before the 40-day waiting period that is usually required for a
> "small estate" transfer of personal property (Calif Probate Code
> sec 13100 et seq).
The 40 day requirement is to protect creditors. It doesn't change
> "Pico Rico" <Pico...@nonospam.com> wrote:
>> "qguy" <qguy...@hotmail.com> wrote:
>>> On which income tax return can we deduct the value of the
>>> donated property: my son's, ours or either one (our choice)?
>>
>> yours. Your son died before it was donated, so his tax year
>> ended.
>
> That's the way I thought about it, and that's the way I handled
> it.
>
> But I started to have doubts because the donation occurred
> before the 40-day waiting period that is usually required for a
> "small estate" transfer of personal property (Calif Probate Code
> sec 13100 et seq).
the fact that, under California law, you inherited his property
immediately, subject to administration. So you really can choose
either and it will be legitimate.
> That left the possibility that it should be claimed on my son's
> 2012 income tax return (the death was in Nov 2012, and the
> donation was in Dec 2012).
deduction on the estate tax return, if there is one.
But again, legally it was yours immediately, so you can take the
deduction for yourself, too.
> Or a 4th possibility I just thought of: no one can claim the
> deduction. As you say, not my son because the donation occurred
> after his death. Not me because perhaps it was not my property
> at the time of donation.
>
> Do those additional facts alter the answer?
concerned.
--
Stu
http://DownToEarthLawyer.com
qguy
May 9, 2013, 11:11:08 PM5/9/13
to
"Stuart Bronstein" <spam...@lexregia.com> wrote:
> The 40 day requirement is to protect creditors. It doesn't
> change the fact that, under California law, you inherited
> his property immediately, subject to administration.
[....]
> The 40 day requirement is to protect creditors. It doesn't
> change the fact that, under California law, you inherited
> his property immediately, subject to administration.
> you are fine, at least with respect to the deduction is
> concerned.
Great! Thanks for the confirmation, Stu and "Pico".
> concerned.
remove ps
May 10, 2013, 8:21:28 PM5/10/13
to
Stuart Bronstein wrote:
> > That left the possibility that it should be claimed on my son's
> > 2012 income tax return (the death was in Nov 2012, and the
> > donation was in Dec 2012).
>
> Right, but there is no reason that your son's estate can't take the
> deduction on the estate tax return, if there is one.
To be clear, the donation would be on the estate return (form 1041) and
> > That left the possibility that it should be claimed on my son's
> > 2012 income tax return (the death was in Nov 2012, and the
> > donation was in Dec 2012).
>
> Right, but there is no reason that your son's estate can't take the
> deduction on the estate tax return, if there is one.
not the decedent's final 1040. From the 1041 a K-1 will be issued to
the beneficiaries, and they would take the deduction on their Schedule
A. However, this method is complicated because a form 1041 must be
filed, and yet the estate is well below the exemption (I think that's
something like $5 million), so no 1041 will even be filed. The issue
is that most estate tax preparers charge at least $600 for an estate
return. So just take the deduction directly on your tax return and
that's it. Sorry about your loss.
Alan
May 10, 2013, 10:58:08 PM5/10/13
to
On 5/10/2013 6:21 PM, remove ps wrote:
> Stuart Bronstein wrote:
>
>>> That left the possibility that it should be claimed on my son's
>>> 2012 income tax return (the death was in Nov 2012, and the
>>> donation was in Dec 2012).
>>
>> Right, but there is no reason that your son's estate can't take the
>> deduction on the estate tax return, if there is one.
>
> To be clear, the donation would be on the estate return (form 1041) and
> not the decedent's final 1040. From the 1041 a K-1 will be issued to
> the beneficiaries, and they would take the deduction on their Schedule
> A. However, this method is complicated because a form 1041 must be
> filed, and yet the estate is well below the exemption (I think that's
> something like $5 million), so no 1041 will even be filed. The issue
> is that most estate tax preparers charge at least $600 for an estate
> return. So just take the deduction directly on your tax return and
> that's it. Sorry about your loss.
>
It is my understanding that in order for an estate to claim a charitable
> Stuart Bronstein wrote:
>
>>> That left the possibility that it should be claimed on my son's
>>> 2012 income tax return (the death was in Nov 2012, and the
>>> donation was in Dec 2012).
>>
>> Right, but there is no reason that your son's estate can't take the
>> deduction on the estate tax return, if there is one.
>
> To be clear, the donation would be on the estate return (form 1041) and
> not the decedent's final 1040. From the 1041 a K-1 will be issued to
> the beneficiaries, and they would take the deduction on their Schedule
> A. However, this method is complicated because a form 1041 must be
> filed, and yet the estate is well below the exemption (I think that's
> something like $5 million), so no 1041 will even be filed. The issue
> is that most estate tax preparers charge at least $600 for an estate
> return. So just take the deduction directly on your tax return and
> that's it. Sorry about your loss.
>
deduction on the 1041, there must be 1. gross income to the estate and
2. the will or other governing instrument must specify that some of the
gross income is be set aside for charitable purposes. If the executor or
personal representative makes a charitable contribution without such
authority it is a breach of his/her fiduciary duty.
Stuart Bronstein
May 11, 2013, 1:37:49 PM5/11/13
to
Alan <temp...@vacationmail.com> wrote
take the dediction on its own.
>> However, this method is
>> complicated because a form 1041 must be filed, and yet the
>> estate is well below the exemption (I think that's something
>> like $5 million), so no 1041 will even be filed.
I think you're confusing income tax with estate tax. The $5 million
exemption is for estate tax. The 1041 is for reporting taxable
income for income tax purposes.
> It is my understanding that in order for an estate to claim a
> charitable deduction on the 1041, there must be 1. gross income
> to the estate and 2. the will or other governing instrument must
> specify that some of the gross income is be set aside for
> charitable purposes. If the executor or personal representative
> makes a charitable contribution without such authority it is a
> breach of his/her fiduciary duty.
That's a good point. But I doubt it should be an issue. As long as
no beneficiary complains, what state law says about it shouldn't have
any effect on federal tax law.
But the, you never know.
--
Stu
http://DownToEarthLawyer.com
> remove ps wrote:
>> Stuart Bronstein wrote:
>>
>> To be clear, the donation would be on the estate return (form
>> 1041) and not the decedent's final 1040. From the 1041 a K-1
>> will be issued to the beneficiaries, and they would take the
>> deduction on their Schedule A.
A K-1 can be issued, but it's not necessary if the estate decides to
>> Stuart Bronstein wrote:
>>
>> To be clear, the donation would be on the estate return (form
>> 1041) and not the decedent's final 1040. From the 1041 a K-1
>> will be issued to the beneficiaries, and they would take the
>> deduction on their Schedule A.
take the dediction on its own.
>> However, this method is
>> complicated because a form 1041 must be filed, and yet the
>> estate is well below the exemption (I think that's something
>> like $5 million), so no 1041 will even be filed.
exemption is for estate tax. The 1041 is for reporting taxable
income for income tax purposes.
> It is my understanding that in order for an estate to claim a
> charitable deduction on the 1041, there must be 1. gross income
> to the estate and 2. the will or other governing instrument must
> specify that some of the gross income is be set aside for
> charitable purposes. If the executor or personal representative
> makes a charitable contribution without such authority it is a
> breach of his/her fiduciary duty.
no beneficiary complains, what state law says about it shouldn't have
any effect on federal tax law.
But the, you never know.
--
Stu
http://DownToEarthLawyer.com
Alan
May 11, 2013, 6:04:12 PM5/11/13
to
On 5/11/2013 11:37 AM, Stuart Bronstein wrote:
>
>> It is my understanding that in order for an estate to claim a
>> charitable deduction on the 1041, there must be 1. gross income
>> to the estate and 2. the will or other governing instrument must
>> specify that some of the gross income is be set aside for
>> charitable purposes. If the executor or personal representative
>> makes a charitable contribution without such authority it is a
>> breach of his/her fiduciary duty.
>
> That's a good point. But I doubt it should be an issue. As long as
> no beneficiary complains, what state law says about it shouldn't have
> any effect on federal tax law.
>
> But the, you never know.
>
I was discussing federal law for points 1 and 2. See IRC Sec. 642, and
>
>> It is my understanding that in order for an estate to claim a
>> charitable deduction on the 1041, there must be 1. gross income
>> to the estate and 2. the will or other governing instrument must
>> specify that some of the gross income is be set aside for
>> charitable purposes. If the executor or personal representative
>> makes a charitable contribution without such authority it is a
>> breach of his/her fiduciary duty.
>
> That's a good point. But I doubt it should be an issue. As long as
> no beneficiary complains, what state law says about it shouldn't have
> any effect on federal tax law.
>
> But the, you never know.
>
its regs and Riggs National Bank of Washington D.C. v. United States,
(173 Ct. Cl. 478 (1965) and Sid Richardson Foundation v. United States,
430 F.2d 710 (5th Cir., 1970).
Going back to the OP, the charitable contribution deduction can be taken
by the beneficiary who inherited the property and made the donation.
Message has been deleted
Bill Brown
May 14, 2013, 8:43:44 AM5/14/13
to
On May 9, 1:30 pm, "qguy" <qguy31...@hotmail.com> wrote:
> My son died intestate, so we (parents) inherited his estate (under $150K).
> Calif law applies.
>
> In settling the "small estate" (informally), I donated his personal
> property -- furniture, clothing, books, etc. The property was donated
> within 2 weeks and in the same calendar year of my son's death.
>
> On which income tax return can we deduct the value of the donated property:
> my son's, ours or either one (our choice)?
>
My condolences on your loss.
> My son died intestate, so we (parents) inherited his estate (under $150K).
> Calif law applies.
>
> In settling the "small estate" (informally), I donated his personal
> property -- furniture, clothing, books, etc. The property was donated
> within 2 weeks and in the same calendar year of my son's death.
>
> On which income tax return can we deduct the value of the donated property:
> my son's, ours or either one (our choice)?
>
Separating the wheat from the chaff of the many responses to your
question, the short answer is that the value of the donated items is a
deduction on Schedule A of your tax return.
brown...@gmail.com
Jun 23, 2014, 6:10:03 PM6/23/14
to
Stuart A. Bronstein
Jun 24, 2014, 11:48:55 AM6/24/14
to
brown...@gmail.com wrote:
> qguy wrote:
>> My son died intestate, so we (parents) inherited his estate
>> (under $150K).
I'm so sorry to hear about your son's passing. That's horrible for
> qguy wrote:
>> My son died intestate, so we (parents) inherited his estate
>> (under $150K).
a parent.
>> Calif law applies.
>>
>> In settling the "small estate" (informally), I donated his
>> personal property -- furniture, clothing, books, etc. The
>> property was donated within 2 weeks and in the same calendar
>> year of my son's death.
>>
>> On which income tax return can we deduct the value of the
>> donated property:
>>
>> my son's, ours or either one (our choice)?
estate (but not his final tax return) or from yours, whichever
works best for you.
> How about if the personal representative claims donations on
> their own personal taxes beyond the estate forms? I've just
> written the courts a memo outlining my mother's mismanagement of
> my grandmother's estate arguing against a huge PR fee that
> equals ~50% of the remaining estate funds after the sale of my
> grandmother's house. She also retains some items that were not
> discussed for division amongst the heirs in probate proceedings.
behalf of the estate. So the PR can't take the deduction himself,
even if he ends up with most of the estate as his fee.
--
Stu
http://DownToEarthLawyer.com
Alan
Jun 24, 2014, 12:20:40 PM6/24/14
to
personal rep might be allowed to take a charitable deduction. E.g., the
PR would also have to be an heir and the distribution of property to
him/herself did not breach the PR's fiduciary responsibility to the
estate and other heirs.
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