IRS and Estate Taxes

The IRS, Estate Taxes and Personal Representative

IRS and estate taxesA personal representative has the responsibility to pay estate taxes owed by the decedent or the estate to the IRS.

Estate taxes are normally paid from probate assets in the decedent’s estate, and not by the personal representative from his or her own assets. However, under certain circumstances, the personal representative may be personally liable for taxes due to the IRS  if they are not properly paid.

Estate taxes and the IRSThe estate will not have any tax filing or payment obligations to the State of Florida. However, if the decedent owed Florida intangibles taxes for any year prior to the repeal of the intangibles tax as of January 1, 2007, the personal representative must pay those taxes to the Florida Department of Revenue.

The decedent’s death has two significant tax consequences. It ends the decedent’s last tax year for purposes of filing the decedent’s federal income tax return, and it establishes a new tax entity, the “estate.”

The personal representative may be required to file one or more of the following returns, depending upon the circumstances:

The decedent’s final Form 1040, Federal Income Tax Return, reporting the decedent’s income for the year of the decedent’s death.

  • IRS estate taxesOne or more Forms 1041, Federal Income Tax Returns for the Estate, reporting the estate’s taxable income.
  • Form 709, Federal Gift Tax Return(s), reporting gifts made by the decedent prior to death.
  • Form 706, Federal Estate Tax Return, reporting the decedent’s gross estate, depending upon the value of the gross estate.

The personal representative may also be required to file other returns not specifically mentioned here. 

To schedule an appointment with Jay Fleece:  

Phone: 727-471-5868   jfleece@legacyprotectionlawyers.com  

Probate and Trust litigation

Probate Assets: Real estate, Insurance, Annuities …

Are Real Estate, Insurance Policies and IRA’s Probate Assets?

Probate administration of assetsProbate administration only applies to probate assets. A probate asset is assets that the decedent owned in his or her sole name at death. Probate assets also were owned by the decedent and one or more co-owners – and lacked a provision for automatic succession of ownership at death.

Some types of probate assets:

real estate probate assetsReal estate titled in the sole name of the decedent, or in the name of the decedent and another person as tenants in common, is a probate asset (unless it is homestead property). Real estate titled in the name of the decedent and one or more other persons as joint tenants with rights of survivorship is not a probate asset.

Property owned by husband and wife as tenants by the entirety is not a probate asset on the death of the first spouse to die but goes automatically to the surviving spouse.

Probate assets Life InsuranceLife insurance policy, annuity contract or individual retirement account that is payable to a specific beneficiary is not a probate asset. A life insurance policy, annuity contract or individual retirement account payable to the decedent’s estate is.

Probate assets bank account and investmentsBank accounts or investment accounts in the sole name of a decedent is a probate asset. A bank account or investment account owned by the decedent and payable on death or transferable on death to another, or held jointly with rights of survivorship with another, is not a probate asset.

This list is not exclusive but is intended to be illustrative.

TO SCHEDULE AN APPOINTMENT WITH JAY FLEECE:

PHONE: 727-471-5868   JFLEECE@LEGACYPROTECTIONLAWYERS.COm

The information above is courtesy of The Florida Bar and represents general legal advice. Because the law is continually changing, some provisions in this blog may be out of date. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.