[WSBAPT] Tenant/Beneficiary Under Will

[Douglas Bratt]

What about the income tax issues involved with the rent payments received by the Estate during the administration?  Reportable? By Whom?  The Estate? The tenants in whom real estate vested at death?

If reportable by the Estate, the K-1 going to the tenant/beneficiaries will be a pass-through (either income or a loss) to the personal income tax returns of the recipients.

Any thoughts about this angle?  (I don't know about others, but this one makes my head hurt.)

Doug Bratt

Douglas J. Bratt
Lawyer

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Heather deVrieze
Sent: Monday, July 17, 2017 4:18 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Tenant/Beneficiary Under Will

I believe RCW 11.04.250 is pretty clear that real estate devised vests at death, together with all rents and profits, so as you propose, the rents, after reasonable expenses (like utilities) are deducted should be delivered to the beneficiary. I think a short statement explaining the net rents returned, together with a check and the deed makes sense. The recipient will also need to sign off on the excise tax affidavit accompanying the deed, and should be notified that the property is transferring with sufficient time to change their insurance to reflect their ownership.

Heather

Heather S. de Vrieze
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Monday, July 17, 2017 3:41 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Tenant/Beneficiary Under Will

Listmates, this is a new one for me and I need a reality check.  Testate Decedent with no family leaves duplexes to various long-term tenants who are paying rent.  There is a professional property manager.  Ok so far but what happens to paid rents after the date of death but before the date of distribution?  The real property transfers to the heirs and beneficiaries upon date of death (RCW 11.04.250) .  The rents have been deposited into a bank account that are still available for reimbursement so we can deliver the PR deeds to the tenants along with a refund check (paid rent minus utilities paid).  Does this sound about right?  What is the general practice out there?

[cid:image007.jpg at 01D2FF2C.3D2B7DB0]



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