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Estate Administration
Probate & Non-Probate Assets
Payment of the Decedent’s Debts
Death Certificates
Probate Court Costs
Attorney / Executor Fees
Role of the Executor
Estate Tax
Income Tax – Estate
Income Tax – Beneficiaries
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IRAs, Annuities, and E and EE bonds all carry deferred income. If the beneficiary is the estate, the income becomes taxable to the estate. If the beneficiaries are many, it is often preferable to designate the estate as beneficiary rather than named individuals.
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To learn more about
Handling An Estate
Contact Us to Schedule a Visit
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The decedent’s executor may need to file a final Form 1040 for the decedent individually and file Form 1041 for the estate, which includes income generated by the probate assets after death. Beneficiaries are given a Schedule K-1 to report any income or losses generated from the Form 1041 on their individual income tax returns.
One of the important concepts of estate income tax is the step-up in basis. This allows the date-of-death fair market value to be used as the cost basis instead of the decedent’s original purchase price. This can be a tremendous benefit when the decedent had stock or real estate that had appreciated greatly in value during his/her lifetime. The step-up applies whether the assets are sold while registered in the name of the estate or after they have been distributed to heirs. Note that this step-up does not apply to tax deferred investments such as 401(k)s, IRAs, annuities, or E bonds.
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