Estate gave away a car

[RitaB]

If an estate gave a car of the decedent to an individual, is the disposal entered on Form 8949 as cost = FMV, and proceeds = zero?

It's April, and this seems correct.  But it's April.  But it seems correct.

But it's April.

[BulldogTom]

Why would you be reporting it?   Is it an asset used in a business?   Is it a really valuable car?  Is the recipient a beneficiary?  A charity?

If I gave a car to someone, I would not report it on my tax return - unless it was given to a charity or it was a business asset or over the value was over the gifting limit.  

Are you overthinking it?  It is April.   

Tom
Longview, TX

[RitaB]

1 hour ago, BulldogTom said:

Why would you be reporting it?   Is it an asset used in a business?   Is it a really valuable car?  Is the recipient a beneficiary?  A charity?

If I gave a car to someone, I would not report it on my tax return - unless it was given to a charity or it was a business asset or over the value was over the gifting limit.  

Are you overthinking it?  It is April.   

Tom
Longview, TX

Bahahaha, well the guy gave me a list of assets in the estate, most sold at FMV, one 1099 with more than 600 in income, so I wanted to do the most, Tom.  Gave it to a youngster that needed a $7,000 car.  Not a beneficiary.

It's April.    

I wish I had a child to claim I mean love.

[Catherine]

The executor could be in trouble here; a $7,000 asset given away for free? Should have been "distributed" to one of the heirs, who can give it to whomever they wish. Distribution of assets to heirs is not taxable when there is no income from that asset.  But the executor - unless s/he had the agreement of every heir - blew it.

[TAXMAN]

Here is an accident getting ready to happen or maybe already did. Executor's just can't give Estate property away without other heirs approval or bequeathed in the will.

[Lee B]

The heirs would have formally relinquish their rights to this asset in writing.

[RitaB]

Thank you all.  I'm sure this guy didn't tell me everything.  I'll press him on who got the car. 

He lied about what he had when he called March 10 to see if I could do his return.  I saw the 1099 to "My Deceased Third Wife Hyphenated Last Name Estate" when he came in on March 14.  

Record scratch sound.  Umm....  I start asking him questions and whoo boy.  The 1099 was not all.  Imagine that.

I say "lied," not was "mistaken" about what he had, because he came to me from another preparer here, and the 2020 Form 1040 was fine.

 

[Catherine]

Well, you now have a known liar as a client. Your requirement for documentation just skyrocketed, because you can't trust a thing from him.  Good luck!  Hug him; maybe that's the best thing to do.