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My dad passed away last June. Do I have to file income tax…

My dad passed away...

My dad passed away last June. Do I have to file income tax for him before June and for his estate after his death?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

Must I file two sets of income taxes for my deceased father, one for before he passed and one for his estate?

Accountant's Assistant: Is there anything else the Accountant should be aware of?

I don't think so. Ask me something more specific. I have no idea what might be pertinent. He had income from his pension and my deceased mom's pension also.

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Answered in 4 minutes by:
1/22/2018
Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 32,838
Experience: Personal Investment, Tax Preparation
Verified

Please accept my deepest condolences for your family's loss.

You have correct understanding - all income the deceased received before the death is reported on the FINAL individual tax return - form 1040.

but all income received in respect of the deceased (IRD - income in respect of the deceased) AFTER the death is reported to the estate - form 1041 and may be passed to beneficiaries.

The due dates are same for both tax returns - for 2017 - that is Apr 17, 2018.

Let me know if you need any help with reporting,

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Customer reply replied 3 months ago
Thank you! I have the 1041 form. My only other question is, how complicated is the filing? Would you recommend I turn it over to a professional or should I be able to do it myself?

In general - especially if there are only a few income items - you may prepare both tax returns on your own.

But in any case - it is recommended to have your calculations to be verified by a professional.

If however - you do not feel comfortable - it might be better to turn all paperwork to the tax preparer.

We still have some time before the deadline - so no rush.

Following publication - you might find it helpful - covers most aspects of filing

https://www.irs.gov/pub/irs-pdf/p559.pdf

There are separate chapters for Final Income Tax Return for Decedent—Form 1040

and for Income Tax Return of an Estate — Form 1041

You are welcome back with all your questions.

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Customer reply replied 3 months ago
Thanks so much for your help! I will let you know if I have any more questions.

I appreciate if you take a moment to rate the answer.
Experts are ONLY credited when answers are rated positively.
If you still have any doubts, need clarification - please be sure to ask.
I am here to help you with all Social Security / Tax related issues.

Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 32,838
Experience: Personal Investment, Tax Preparation
Verified
Lev and 87 other Finance Specialists are ready to help you
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Customer reply replied 3 months ago
Are you still there Lev?

Yes - I am here.

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Customer reply replied 3 months ago
Phew!! I'm working on Form 56 and am almost finished. The form is asking for the docket number of proceeding. The only number I can find on any of the documents is an estate number. What do I do???
Customer reply replied 3 months ago
The only Doc ID I find is concerning an affidavit as to matters of title. I assumed the proceeding they are asking about is my receiving my letters testamentary.

In most situation - form 56 is not required.
Based on your information I do not think you need to file this form.

Just start with the FINAL tax return for the decedent - form 1040.
After it is completed - we may move to 1041.

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Customer reply replied 3 months ago
Well, one less form is good! Thank you!!!
Customer reply replied 3 months ago
Good morning Lev.
I have, indeed, moved on to Form 1041 and have more questions that I hope you can answer.
Fist of all, as far as I can tell, the only income Dad's estate had is interest on his life insurance policy. None of the other lines seem to apply. Then we come to line 8 that says "other income". What on earth could that be????
Customer reply replied 3 months ago
Would that include the life insurance payout?

Yes - interest on the policy is taxable income.

Interest credited before the death is reported on the final tax return - not on 1041.

So most likely - you will have very little or no interest on 1041.

The life insurance proceeds paid because of the death are NOT taxable and not reported on 1041.

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Customer reply replied 3 months ago
Okay. What about the fee for the probate attorney? Is that deductible on line 14? The instructions skipped that one.

Yes - legal expenses paid by the estate are deducted here - including probate expenses.

These are normally deducted on line 12.

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Customer reply replied 3 months ago
Looks like the taxable income is zero. Is that unusual? The next line is Total Tax (from Schedule G, line 7). I looked that up and it's about expenses incurred for food and beverages. There must be another schedule G.

Not unusual for small estates.

Schedule G is used to calculate tax liability - but if taxable income is zero - there is nothing to calculate.

Schedule G is on the second page

https://www.irs.gov/pub/irs-pdf/f1041.pdf

There is nothing specifically regarding food and beverages - I think you are looking into a different place...

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Customer reply replied 3 months ago
That's the second time today I've been a little dim. That's as far as I've gotten on form 1041. I'll let you know if I have any more questions. Thanks Lev!
Customer reply replied 3 months ago
Good morning Lev!! I think I just have one last question for you. The estate had no income except interest on an insurance policy. Deductions for the probate attorney and property taxes. There is a $600 exemption allowed. Everything else is zero. It looks like I have no need for the page with Schedules A, B, and G. Can it really be that simple?

Yes - that is possible for simple situations like yours

If taxable income is zero - no need to calculate tax liability - and leave schedule G blank.

If there is no charitable contributions - leave schedule A blank

If there is no distributions to beneficiaries - leave schedule B blank

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Customer reply replied 3 months ago
Lots of zeros! I was making it more complicated that it really was. No tax due and no refund expected. Should I include a copy of Dad's death certificate and/ or my letters testamentary with the returns?

That is not required.

Form 56 is used to notify the IRS of the creation or termination of a fiduciary relationship under section 6903 and provide the qualification for the fiduciary relationship under section 6036

You may attach that form to final 1041

https://www.irs.gov/pub/irs-pdf/f56.pdf

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Customer reply replied 3 months ago
Then I think our work here is done!! Thank you so much for your help. I rated you after our first session. Should I rate you again? Cause you have earned many gold stars!

You may - but that will not change anything as the question was already rated.

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Lev
Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 32,838
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Experience: Personal Investment, Tax Preparation

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