What would you do if your mother deducted a debt you owe her from the inheritance you are supposed to receive? This is what happened to a person in the United States, as reported by Market Watch. After asking his mother for a loan of $20,000, of which he could only pay back $5,000, leaving a remaining debt of $15,000. Now, when the time for the inheritance has come, each one was supposed to receive $146,000. The surprise is that from his share, he only received $126,000, seeing the debt deducted.
It is now that the affected person wants to claim that he did pay back $5,000 and demands that his mother’s 2022 tax return be amended. Furthermore, he mentions that his sister, the lawyer who has handled all the procedures related to their mother’s inheritance, is angry with him and very hurt by what he is proposing. Given the characteristics of the loan and the years that have passed, the Internal Revenue Service (IRS) considers this loan as a gift, since he also did not charge interest on it, which should have been declared as a deduction for bad debt, as indicated by Turbo Tax.
The affected party claims that he is living in a nursing home, and that he has health problems and difficulties paying for his Medicare insurance, so he needs the amount to be collected from the inheritance to be increased by $5,000. However, the response from the media is that his request makes no sense, and that he should be more concerned about resolving his family situation than his financial one, which has no further developments.
Loan application
The media outlet Market Watch has reported on the inquiry from an individual who explains the family and financial drama he is facing and is asking for help. He is a man residing in the United States who received a loan of $20,000 from his mother in 1996 to buy a house. He managed to pay back $5,000, leaving $15,000 remaining, which he could never afford to repay.
Because of this, his mother, before passing away, stated in her will that the $20,000 owed would be deducted at the time he received his inheritance. When the time came, the inheritance was divided, with each sibling receiving $146,000. However, this individual, at his mother’s express request, was only entitled to $126,000, which took him by surprise.
What is happening now?
The affected person has stated that he is in a somewhat vulnerable situation, as he lives in a residence, has health problems, and can barely afford his Medicare insurance. In light of this situation, he has asked his sister (his mother’s lawyer) and the media for help in considering the $5,000 that he did return to his mother, and that it should be added to the amount received in the inheritance.
This has not only caused anger on the part of his sister, but it also has a much larger financial background. At the time his mother realized that she would never recover the money, she should have declared it as lost money, as a bad debt. On the other hand, since his mother did not charge him interest, the Internal Revenue Service (IRS) interprets it as a gift and not a loan, which also should have been declared.
How is the inquiry resolved?
The affected person requests that their mother’s 2022 statement be modified to add the $5,000 that was indeed paid. However, both experts and those from the medium where they consulted advise them to stick with the amount received and resolve the issues with their family, as financially, their request has no merit.
