Tax {estate tax} returns {federal estate tax return} can report estate income after death. Administrator must file Fiduciary Income Tax Return on Form 1041 for estate from day of death to day of estate distribution. It uses an identification number like that used by businesses for tax purposes, obtained by application on Form 554 to IRS.
Administrator can have estate tax imposed on estate value at death or six months after death. Administrator must file Form 706 within six months of death, including copy of will. Administrator is liable for false returns. Administrator does not have to do inheritance-tax work.
Estate administrator or executor pays tax on property value left by deceased, usually excluding life insurance and social security, if estate value exceeds a large amount. Administrator must file federal estate tax return if estate has high-enough value.
will
Wills can reduce estate taxes and estate administration costs.
gifts
Gifts can reduce estate tax, because gift tax averages 3/4 of estate tax. People can avoid gift taxes up to yearly and lifetime limits. Bequeathing to charity reduces adjusted gross estate by full bequest value. Gross estate includes gifts given within three years of death, because gift was in contemplation of death, unless executor can show deceased did not expect to die that soon.
joint ownership
Government presumes jointly owned property to be part of deceased's estate. If survivors can show what property part they contributed, that part does not belong to estate.
Practical Affairs>Legal Affairs>Death>Will>Finance
7-Legal Affairs-Death-Will-Finance
Outline of Knowledge Database Home Page
Description of Outline of Knowledge Database
Date Modified: 2022.0224