February 6, 2013
Four Tips for Executors
Whether one is appointed in a will as an executor or appointed by the court as an administrator, whoever has to close down an estate has a hefty responsibility. SmartMoney provides a checklist that features four major steps an executor needs to consider:
1. Filing the final 1040: First, an executor needs to file the decedent's taxes for the year of his or her death, covering the period from January 1 through the date of the death. The return date is still April 15. Executors should be sure to take medical expenses into account because they can potentially be deducted on that final tax return.
2. Filing the Estate's Income-Tax Return: In addition to filing the decedent's individual final income taxes, the executor needs to file the estate's income tax as well. The estate's first year income begins right after the decedent's death. The year-end can be December 31 or the end of any other month that results in an initial tax period of 12 months or less. An executor must file this by the 15th day of the fourth month after the year-end.
3. Filing the Estate's Estate-Tax Return: This is filed on a Form 706. If the decedent did not make any sizable gifts before dying, unless the estate is worth over $5.5 million for 2013 decedents, no estate tax is due and no Form 706 is required. If a Form 706 is required, it is due nine months after death with the possibility of a six month extension.
4. The Miscellaneous Details: These details include getting a federal employer identification number for the estate, filing a form 56, which notifies the IRS that the executor will be acting on behalf of the estate regarding tax matters, opening a checking account in the name of the estate with some funds transferred from the decedent's accounts. There could be more executor responsibilities beyond these details as well.
See Bill Bischoff, Closing Down the Estate, SmartMoney.com, Feb. 5, 2013.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention
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It's up to 10 bucks, and now it will be the the "Cook County Democratic Committee".
Posted by: bjc | Feb 8, 2013 6:24:30 AM