My mother in law died 3 years ago. She was in her late 70's. My sister in law is the POA. We were contacted by a former employer that she had a small pension $5500 and they sent my SIL a check minus 20% federal taxes.
My SIL cashed the check and gave half the money to my wife.
Now my SIL has a 1099-R saying the $5500 was a normal distribution.
I'm not sure how to file this. Seems like I should use a 1041 and file for the estate. However, schedule G to figure out the tax seems high: (15% for the first $2450 and 25% after that). We also have to file state taxes, which they witheld nothing..
Can my SIL make out a K-1 and my wife and I file half on our taxes and my SIL files half on her taxes?
Any help is appreciated.
My SIL cashed the check and gave half the money to my wife.
Now my SIL has a 1099-R saying the $5500 was a normal distribution.
I'm not sure how to file this. Seems like I should use a 1041 and file for the estate. However, schedule G to figure out the tax seems high: (15% for the first $2450 and 25% after that). We also have to file state taxes, which they witheld nothing..
Can my SIL make out a K-1 and my wife and I file half on our taxes and my SIL files half on her taxes?
Any help is appreciated.