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My father-in-law passed away this year. All of his assets were depleted to cover medical & finl expenses. In doing his final PA state tax return I discover $53 is owed but there is no money left. Does this amount still need to be paid? If not how do I indicate it on the tax form?
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My father-in-law passed away this year. All of his assets were depleted to cover medical & finl expenses. In doing his final PA state tax return I discover $53 is owed but there is no money left. Does this amount still need to be paid? If not how do I indicate it on the tax form?

If the estate has no assets, there's nothing for the state to collect from. A balance-due return for a decedent without a check will inform them they're not getting paid. Their computer will probably send a bill, and the administrator of the estate can send a letter saying there are no assets.

Phil
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<Their computer will probably send a bill, and the administrator of the estate can send a letter saying there are no assets.>


Phil:

I understand that if there is nothing left there is nothing left. I am curious just how tightly defined is that? We have a number of posters here who talk about their "worthless stock" when in fact it is not worthless from a tax POV. In those cases one needs a formal declaration from the company or the bankruptcy court in order for the stock to be deemed legally worhthless.

In this case, looking at things from a practical POV (I admit, not usually a very smart thing to do when it comes to taxes) it may make sense for an administrator to just pay the $53 to resolve the matter. I can envision a series of correspondence stretching out over several years with the tax authorities that could easily eat up a lot more than $53 of a persons time. If paying the $53 out of one's pocket permanently resolves the issue, I would consider it a reasonable use of the $53.

I understand that each of us may differ on when we would deem it worthwhile to pay or to not to pay such a bill. Does the IRS have any definitions on this? While the bank accounts may well be depleted, I would expect that in many cases there is at least some personal property that could be sold to more than cover this minor expense. It is really sad to think about an older person having nothing but the hospital gown on their back as their only worldly possession.


B
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In this case, looking at things from a practical POV (I admit, not usually a very smart thing to do when it comes to taxes) it may make sense for an administrator to just pay the $53 to resolve the matter. I can envision a series of correspondence stretching out over several years with the tax authorities that could easily eat up a lot more than $53 of a persons time. If paying the $53 out of one's pocket permanently resolves the issue, I would consider it a reasonable use of the $53.

I understand that each of us may differ on when we would deem it worthwhile to pay or to not to pay such a bill. Does the IRS have any definitions on this?


I would assume that all taxing authorities have some sort of "write off" level below which they won't pursue collection because it would cost them more than they'd recover. If they don't, they should.

The sad thing is that when I was a friend's executor (and heir) I cried when I wrote the check to pay his taxes from estate funds. I knew good and well the IRS would never figure out how to collect it if I didn't pay it voluntarily, but those damn scruples got in the way again!

Phil
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Final expenses (funeral and burial) are technically not the responsibility of the estate. The amount is small and the state probably will not pursue it. it is not like his credit rating is a concern. Personally, I would pay it just to avoid having my spouse see statements regarding their father continue to arrive from the state.

Debra
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Final expenses (funeral and burial) are technically not the responsibility of the estate. The amount is small and the state probably will not pursue it. it is not like his credit rating is a concern. Personally, I would pay it just to avoid having my spouse see statements regarding their father continue to arrive from the state.

Statements from the state? Hah!! My parents died in 1985 and 1993 and I still get mail addressed to them and neither of them ever lived at my address. I've tried everything but it seems to be impossible to get a name purged from commercial mailing lists.

Ira
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This is probably in the catagory of nit-picking Debra, but funereal and burial espenses and all bill of the deceased ARE the responsibility of the estate. You cannot close a Probate nor transfer assets to the heires unless these are paid (albeit someone other than the estate may have paid them).
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If the estate has no assets, there's nothing for the state to collect from. A balance-due return for a decedent without a check will inform them they're not getting paid. Their computer will probably send a bill, and the administrator of the estate can send a letter saying there are no assets

Say that someone dies with $40,000 of assets and $50,000 of credit card debt. Would the same thing be true in this situation? i.e. the assets would go towards paying off the debts and for the remaining $10,000 of credit card debt, the executor would just tell the credit card company that there are no assets (i.e. the debt would not pass on to the heirs)?

Randy
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Say that someone dies with $40,000 of assets and $50,000 of credit card debt. Would the same thing be true in this situation? i.e. the assets would go towards paying off the debts and for the remaining $10,000 of credit card debt, the executor would just tell the credit card company that there are no assets (i.e. the debt would not pass on to the heirs)?

Assuming that it was the sole debt of the decedent, yes.

Phil
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