How to file deceased mother’s 1099-R
I am seeking advice on how to file a 1099-R form recently received from my deceased mother’s IRA custodial company. My mother passed away in January of 2012, at which time she was 83 years old. Her IRA consisted of a 10% share of jointly owned (tenancy in common) undeveloped desert property. Her share of this investment was $14,000. I believe this is the amount she never paid income taxes on and this amount is shown as a taxable distribution on the 1099-R form I am inquiring about. None of the tenancy in common owners have paid property tax on this property for many years. Because of this, the county has put the property up for auction to recover the unpaid property tax, in other words, I don’t ever expect to see any of my mother’s $14,000 investment. Upon my mother’s death in 2012, I notified the IRA custodial company and provided them with a copy of her death certificate. Last year, the IRA custodial company closed this IRA account since they could not determine the fair market value of the undeveloped desert property; the 1099-R form I received is in my mother’s name with her social security number. In 2013, I filed my mother’s final federal income taxes for the 2012 year. It is my understanding that my mother paid the required minimum distributions (RMD’s) each year for this undeveloped desert property IRA from other IRA’s she owned that held liquid assets; however, this would have ceased upon the year of her death since I had no understanding of IRA RMD’s at the time (I had not yet read Ed Slott’s book) and thought the IRA custodial company I was paying would manage this for me. What I need to know is (1) how to file the 1099-R form that is in my mother’s name and (2) how to determine the amount of income tax that is due.
Thank you for your time and advice.
Permalink Submitted by Alan - IRA critic on Sat, 2018-02-10 04:43
The 1099R should not have been issued under your mother’s SSN unless the IRA was never retitled as a beneficiary IRA. Who was the beneficiary, you, her estate, or someone else?
Permalink Submitted by Keith Miller on Sat, 2018-02-10 19:31
Thank you for your response to my inquiry. I believe you are correct that the IRA in question was never retitled. The only change in my deceased mother’s IRA title is that a “D” in parenthese was added after her name and her mailing address was changed to mine. I believe my three siblings and I are designated beneficiaries for my deceased mother’s IRA and I am the executor of her will. I do not know or recall if any of us completed the paperwork necessary to distribute this illiquid asset (i.e., 10% of an undeveloped desert property) that none of us really knew what to do with or wanted. We had spoken with financial advisors, an estate attorney, and a real estate attorney and no one seemed to know what to do. My brother and I also contacted the IRA custodial company several times by telephone and neither of us ever received a useful answer to our inquiries. What I am looking to do is pay whatever income tax is due on my deceased mother’s failed $14,000 IRA investment. I would like to do this with a minimum amount of paperwork and cost. Any of your thoughts on this are greatly appreciated.Thank you for your time and willingness to share your expertise.
Permalink Submitted by Alan - IRA critic on Sun, 2018-02-11 01:48
Permalink Submitted by Keith Miller on Sun, 2018-02-11 22:05
Thank you for your very thorough response to my inquiry. I greatly appreciate your input.