Discrepancies in deceased dad’s tax returns/ estate reporting

2 Replies

my dad passed away a few months ago. I have been collecting rent on 2 legal units and 1 illegal unit in a 3 family home. The rent is paid in cash there are no leases. My dad and i resided in the first floor apartment. I'm in the process of submitting his will for probate where I Am the proposed executor and in doing so examined his tax returns for confirmation because no tenant has a lease. I noticed that the past two years my father underreported the rental income. He never reported any of the illegal units rent or the public assistance payments he was getting for my room. I don't know whether to just repeat my father's figures so as to settle his estate as quickly as possible and avoid any potential IRS mess + then remove the illegal unit/tenant once I am legally the owner and report properly as the new owner. Or I begin reporting properly now and open up my dad's estate to a slew of lawsuits esp considering one of the units was illegally built. HELP!

Ohh boy not many people on here are going to be able to offer you legal advice myself included, however don't lie to the IRS..... just don't. Report accurately and deal with the consequences of your father's actions.

@Charlie Flowers

Not reporting all the income can possibly mean the statute of limitations didn’t start (depends on amount) in which case the IRS can come after you at any time. On your dad’s Estate income tax return, I would report all the income after date of death through estate closure. I would also amend his 2-3 prior individual income tax returns to report all income during the last couple years.