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Do I need to file a final tax for an insolvent estate?

Sacramento, CA |

My father passed away in 2003, estate was found to be insolvent with outstanding creditor claims. In 2011, $3500 was found belonging to my father. I have had to provide an estate EIN to claim the funds. Creditors will be paid out from these funds, leaving the estate as insolvent again. Will I have to file another tax form as the executrix of his estate for 2011?

Attorney Answers 2


Anytime a payment is received under an EIN number, the IRS is notified by the financial institution making the payment. It is prudent and possibly required to file a final tax return for the estate to avoid problems in case you are audited. The cost of preparing the return is a priorty expense and will be paid by the estate before the creditors are paid. As a footnote, the term executrix (the female form of executor) is no longer used as being archaic and biased. Male and female executors are now referred to by the non gender specific term "executor."

Nothing contained in the information on this web site is to be considered as the rendering of legal advice for specific cases and readers are responsible for obtaining such advice from their own legal counsel. This web site is intended for educational purposes only. Michael R. Weinstein, is licensed to practice only before the courts of the State of California, and is admitted to practice before the United States District Court for the Central District and the United States Cou rt of Appeal for the Ninth Circuit. No information contained herein is to be considered applicable to legal matters in domestic or foreign jurisdictions outside of the State of California.

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It is doubtful that this amount of money would require you to file an estate tax return unless your father had a taxable estate in 2003. If this was unreported income you may need to file an income tax return to claim the income.

Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.

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