The kids took their duties seriously and started liquidating assets mostly because Left had lots of ways to spend the money and his sister just wanted to be rid of him. They sold all the stocks for $150,000. The sold the house of $750,000 and netted about $730,000 after closing costs. They each took out $440,000 and shut down the estate. They were really proud of themselves for their care in carrying out their duties. Left couldn’t wait to spend his money. His new girlfriend, Hot Potato, had him wrapped around her little finger. He bought a fancy car for $75,000, some jewelry for her to the tune of $50,000, and some clothes for both of them to the tune of $100,000. They went to expensive restaurants. He was on a spending spree.
Monthly Archives: February 2010
Capital Gains Quandry
Beulah Gladhand died on January 2, 2010. She was survived by two children, Suzie Marachino and her son, Left Gladhand. Suzie and Left qualified as Executors of her estate. She was not a rich woman when she died. Her estate included a house that she and late her husband Clem had purchased together in 1973 for a whopping $75,000. Now the house was worth $750,000. The rest of her estate was about $150,000 in stocks and bonds which she also had bought together with her husband over their marriage.
Case Closed
Brian Peterson went to his Supervisor. “Sir, while this is probably a suicide, there is no note and no evidence of intent to defraud the government. My view is that we’d get our heads handed to us on this.” “Thanks, Brian, let’s call the General Counsel and see what he has to say.” The called the Chief Counsel, “If we can’t prove fraud and have no probable cause to search for a note, there is no sense in wasting our time on this, prepare a closing letter.”
Three weeks later.
Becky saw the envelope from the IRS. It was thin. She tore it open and saw that it was a closing letter. She closed her eyes and let fly a deep sigh and put it in a file. Her next call was to the Mercedes dealer. “Might as well stimulate the economy”.
Next Tax Tale will deal with some crazy questions involving deaths in 2010 and basis issues on capital gains. With that, one precautionary word. If we have another foot of snow here in DC and the power or phone lines get damages, I might be off line for 24 hours. So, don’t give up on me.
J
Well, let me explain.
Brian Peterson blinked into the phone. Then responded, “Well, there was a notation of possible suicide on the autopsy report and I wanted to find out if it was a suicide or not?” “Not to be disrespectful, but what difference should that make to you?” Becky responded. Brian paused thinking of the appropriate answer. “I’m sorry, I certainly didn’t want to cause you any hurt, but if it was a suicide, then we might have to look into whether a fraud assessment was appropriate.” Brian anwered as gingerly as possible and hoping to get off the phone as soon as possible. “Wouldn’t she have to have killed herself, solely to try and save taxes for it to be fraud?” Becky asked. “I mean what if she was depressed and just killed herself, would that be tax fraud?” Brian thought for a second and answered, “no, it wouldn’t and that’s why I asked about a note.”
The Dreaded Phone call
“Hello, is this Becky? This Brian Peterson, I am an estate tax examiner with the Internal Revenue Service, and I am examining Beatrice’s return. I am about to close the file, but I have a question?” “Yessir, I’ll try and answer it, if I know the answer”, Becky replied. “Great, what I need to know is this, did your mother leave a suicide note?” Brian asked. Becky hesitated for a second and answered, “no, why do you ask?”