Mckinney, TX asked in Tax Law for Texas

Q: My dad had a mobile home in NY that he voluntarily surrendered in 2014. My dad passed away on 5/25/19.

We just received an audit letter stating they need to pay over $4500 on that surrender. I am assuming the loan company for the mobile home has sent something to the IRS (not sure what). My mom was not on the original loan, only my dad. Is my mom responsible or can she file as a non- obligated spouse. My mom has moved here to Texas with me and is in the early stages of dementia. I am handling all of the issues since my dad's passing.

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1 Lawyer Answer
Andrew M Steiger
Andrew M Steiger
  • Tax Law Lawyer
  • Grosse Pointe, MI

A: You should consider showing the IRS notice letter to a tax attorney who offers a free consultation. If the notice relates to cancellation of debt income related to surrendering the home and mortgage to the lender, then you’ll need to consider whether they filed a return for that year, what they reported if they did, when the lender sent them a 1099 if at all, when the IRS sent them an assessment and whether the tax year is closed to new IRS assessments. You’ll need to see the documents. For that year, there may be relief for mortgage forgiveness or cancellations. If the tax debt is valid and enforceable, the estate executed or personal representative should be aware of it and not ignore it. You might also have to consider state tax issues and whether any additional income needs to be reported. An attorney would need a lot more information to provide you with specific advice. Good luck.

Bruce Alexander Minnick agrees with this answer

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