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    khammons's Avatar
    khammons Posts: 1, Reputation: 1
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    #1

    Jan 10, 2012, 10:52 AM
    Father passed away and left my children payments from a house note he had financed.
    My father passed away this past Spring. In his will he left to my children the payments that he was receiving on a house that he toted the note for in Oklahoma. The owners pay principal and interest to me to put in a trust fund for my children to distribute to them as I choose. I have two questions on this. 1) Do I need to send any tax forms to the owners of the house for principal and interest for them to file on their taxes this year and 2) Do I need to file anything on my taxes as "inheritance" as I am receiving money from this house payment each month?

    Thanks,
    Kristin
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jan 10, 2012, 12:20 PM
    1) Yes; you need to send them (and the IRS and possibly the state of Oklahoma) Form 1098 under a transmittal form (Form 1096). You will be doing this as the executor of the estate. Based on your post, the ESTATE is receiving the money, so it must file the forms.

    2) The estate may need to file fiduciary returns for both the IRS and the state of Oklahoma.

    Do NOT rely on any post of this forum to be your definitive guide. RUN, don't walk, to a local tax professional with experience in estate taxes in Oklahoma and get face-to-face guidance on how to proceed.

    Also, if you have not already done so, get an tax identification number for the estate from the IRS.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #3

    Jan 10, 2012, 12:41 PM
    I think you also need to be sure that the owners are writing checks made out to your husband's estate, not to you. +1 on ATE's strong suggestion to meet with an experienced professional about this.
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