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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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An estate deducted administrative expenses on its State

Customer Question

An estate deducted administrative expenses on its State Estate tax return. Since these expenses were not deducted on a federal tax return since none was required, does the fact that they were taken on the state estate tax return preclude a deduction on the Federal fiduciary 1041? Is this double dipping if no federal estate return was required?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Federal and state income tax liabilities are calculated separately - that is true for individuals for corporation and for estates.

So - there is no double dipping.

If there are deductible expenses for federal income tax purposes and the estate does not file the federal income tax return (form 1041) - these deductions are "lost"

If the administrator of the estate chooses to file the estate tax return (even otherwise it is not required) - and if that is a final tax return for the estate - unused deductions are passed to beneficiaries - and may be used on their individual tax returns.

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