Legal Question in Wills and Trusts in California
My mother was a trustee for an estate . The estate paid 1,500,000
in Fedeal estate taxes in 2007 .
A year later an investment that was made by the estate
crashed and lost 1,500,000 .
My mother was sued and lost and a judgement
was filed for 1,500,00 against my mother.
The judgement is uncollectible.
My mother then sued her atty and won back the 1,500,000
but that was alkso uncollectable from her atty.
She won underr the grounds that the atty commited
a malpractice by originally
(In 2007 when the guy first died before the original
1,500,000 estate tax was paid should never have hired the incompetent guy
that made the bad investments for the esatte,
Since the judgement against estate atty is uncollectable
and the act of hiring occured in 2007BEFORE the initial 1,500,00 estate taxes wree paid
Can we possibly write of that uncollctable
trust atty malpractice loss of 1,500,000 against
the origibal Federal estate tax and get a refund of some of the money
paid in Federla estate taxes.
1 Answer from Attorneys
This is really a tax law question. With so much money potentially involved you need to be willing to pay for a consultation with an attorney. My guess is that the estate tax was proper as it was as to the value of the estate at the time of death. The estate would be allowed to carry the investment loss forward and then back against capital gains and then $3,000 in income but I do not think it can offset the estate tax as that is a separate item from income or capital gains.
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