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Do we have to pay the taxes owed by our deceased relative?

Forum|Forum|6 years ago
June 1, 2019
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My brother-in-law passed away last March and my husband and I are his only family. The only money he had left was in an IRA. Shortly before he died we cashed in the IRA so that we would have money to pay for his funeral. We had 10% withholding taken out at that time, but now when I am doing his taxes it says he owes about $5500 in taxes. Do we have to pay that?

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Best answer by fanfare

A final tax return must be filed for any deceased person.

Unless you had Power of Attorney to cash out his IRA, he must have authorized this himself, and the tax on that IRA distribution must be paid with his final tax return.

If your brother-in-law's estate is insolvent, it is not your job to pay his income taxes.

However, taxes and then medical bills must be paid before any other funds or assets can be distributed. Thus, beneficiaries will not owe federal taxes either. A devise or inheritance is not income. Depending on his State, they may owe a State transfer or inheritance tax.

fanfareAnswer

A final tax return must be filed for any deceased person.

Unless you had Power of Attorney to cash out his IRA, he must have authorized this himself, and the tax on that IRA distribution must be paid with his final tax return.

If your brother-in-law's estate is insolvent, it is not your job to pay his income taxes.

However, taxes and then medical bills must be paid before any other funds or assets can be distributed. Thus, beneficiaries will not owe federal taxes either. A devise or inheritance is not income. Depending on his State, they may owe a State transfer or inheritance tax.

B

brebaby69

Unless you are claiming him as a dependent or you are the beneficiary of his estate you are not responsible for his taxes. If he is deceased there is no need to file a tax return.