The Estate Income Tax Returns: The Plan to Complete the Returns

08 Monday May 2017

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Attorney, Beneficiaries, Beneficiary, Charitable Deductions, charities, Deductions, Estate Income Tax Returns, Fiscal Year, Tax Planning, Tax Professional, Taxable Income, Will

On July 8, 2013, the plan to complete the returns came into focus. On this day, the tax professional asked for a copy of the will to complete the planning. At the time, the tax professional was looking into charitable deductions and if the will provided for them. So, I sent a copy of the will through email as a PDF file. In addition, in the same email, I outlined why I wanted the estate to pay the estate income tax. After sending the email, I knew the plan to complete the returns was near completion.

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The Cleanup of the Decedent’s Home Office and the Final Task

01 Monday May 2017

Posted by Robert Dowling in Estate

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Acting Executor, Cemetery, decedent, estate, Estate Income Tax Returns, Executor, Grave Site, Home Office, probate, Tax Professional

While the tax professional was planning the estate income tax returns, I decided to clean up the decedent’s home office. Early in the administration I set up my home office to administer the estate. However, I moved only the documents and property needed to properly administer the estate. Consequently, I left the rest of the documents and property in the decedent’s home office. So, while in limbo, I thought it was a good time to finally clean up the decedent’s home office.

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The Estate Income Tax Returns: Prepare the Tax Documentation

24 Monday Apr 2017

Posted by Robert Dowling in Estate

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1099's, Belligerent Beneficiary, Beneficiary, Estate Income Tax Returns, Expenses, Federal Estate Income Tax Return, Final Tax Returns, Income, Inherit, Rental Property, Social Security Numbers, Tax Documentation, Tax Planning, Tax Professional

In May 2013, soon after meeting with the belligerent beneficiary, my focus turned to the estate income tax returns (returns). After reviewing the tax documentation used for the final returns, I became uncertain about the tax documentation needed to prepare the estate income tax returns. That uncertainty gave me reason to pause. This is when I realized that this chaotic estate was going to close on time. After months of worrying about the run-down rental property, the tenants, and associated expenses, the estate would actually settle on time. So, with the returns not due until December 15^th, there was no need to rush. Furthermore, instead of wallowing in uncertainty, I called the tax professional for some guidance on the tax documentation.

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How to Prepare the Federal Estate Income Tax Return

17 Monday Apr 2017

Posted by Robert Dowling in Taxes

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Accounting Period, Benficiary, Calendar Year, Estate Administration, Estate Expenses, Estate Income, Executor, Federal Estate Income Tax Return, Fiscal Year, Income Distribution Deduction, IRS, Schedule K-1(Form 1041), State Estate Income Tax Return, Tax Professional

The federal estate income tax return is a difficult tax return for an executor to file. The different income types and complex deductions involved in the return causes confusion for the executor. Therefore, most executors will hire a tax professional skilled in estate tax returns to help them prepare and file the federal estate income tax return.

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Track the Administration Expenses of the Estate

10 Monday Apr 2017

Posted by Robert Dowling in Record Keeping

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Accounting Fees, Administration Expenses, Aministration Expenses of the Estate, Attorney Fees, Capital Losses, Charitable Deductions, Common Estates, estate account, Estate Taxes, Estates, Executor Fees, Executors, Federal Estate Income Tax Return, Fiduciary Income Tax Return, Gross Estate, Gross Income, Income Distribution Deduction, State Income Tax Return, Tax Preperation Fees, Will

Executors needing to file a federal estate income tax return must track the administration expenses of the estate. In general, the IRS allows for the deduction of administration expenses from the gross income of the estate. Therefore, in addition to tracking income of the estate, the executor must also track the administration expenses of the estate.

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Communicating with Beneficiaries: Executors Should Use Common Sense

03 Monday Apr 2017

Posted by Robert Dowling in Beneficiaries

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Assent Forms, Beneficiaries, Beneficiary Rights, Common Estates, Communicating, Communicating with Beneficiaries, Details of the Estate, estate, Executor Rights, Final Accounting, Poll Beneficiaries, Polls, Reading of the Will, Sharing Details of the Estate, Will

When communicating with beneficiaries, executors should use common sense. To have a smooth administration the executor should communicate regularly with the beneficiaries as revealed in the article Communicating with the Beneficiaries is Essential for the Executor. However, when it comes to sharing details of the estate, the executor should use common sense. Otherwise, sharing too many details with the beneficiaries may cause confusion and turmoil in the estate.

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Handling Found Property from a Different Estate

27 Monday Mar 2017

Posted by Robert Dowling in Estate

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Attorney, Beneficiaries, Common Estates, Distribution, Distribution Plan, Estate Administration, Estates, Executor, Forgotten Assets, Found Property, Holographic Will, Inventory of Assets, personal possessions, Property

In some common estates, executors may find themselves in unique situations such as handling found property from a different estate. Early in the estate administration, while sorting through possessions, my Uncle’s stepdaughter found a large, bulky envelope. In the envelope was a blue topaz ring and fifty-four hundred dollars in cash. As the stepdaughter handed me the property, I asked, “Where did you find this?”

The stepdaughter replied, “I found the envelope” – as she looked towards a box – “on top of the box near the stairs.”

So, I quickly went over to the box to sort through the contents. The box contained property and documents associated with the estate of my Uncle’s cousin in which my Uncle served as executor. Apparently, the cash and the ring were the contents of the cousin’s safe deposit box. Moreover, my Uncle forgot to include the property in the cousin’s estate for distribution before closing the estate. So, confused about how to handle the property, I put the matter aside until I could discuss the dilemma with my attorney.

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List Your Beneficiaries Wisely in Your Estate Plan

20 Monday Mar 2017

Posted by Robert Dowling in Planning Tips

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Annuities, Beneficiaries, decedent, Estate Assets, Estate Expenses, Estate Plan, Estate Property, Executor, Indebted Estate, Inherit, Life Insurance, Primary Beneficiary, probate, Probate Avoidance Strategy, Probate Court, Retirement Plans, Secondary Beneficiary, Will

When developing your estate plan, list your beneficiaries wisely. In some common estates, overlooking the fact that a beneficiary listed on an asset supersedes a beneficiary listed in a will causes problems with beneficiaries and what they inherit. Because assets with a designated beneficiary goes to the beneficiary, the property is not part of the estate. Conversely, if a beneficiary is to receive property through the will, the property must go through probate. Moreover, if the executor sold estate assets to cover expenses, the beneficiary receives a reduced amount or nothing at all. So, to avoid problems with beneficiaries, list your beneficiaries wisely.

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When is the Right Time to Confront a Belligerent Beneficiary?

13 Monday Mar 2017

Posted by Robert Dowling in Beneficiaries

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Administration Plan, Asset Settlement Phase, Belligerent Beneficiary, Beneficiary Rights, Confrontation, Confrontation Between Executor And Beneficiary, Consequence, Contest The Will, estate, Estate Administration, Executor, Handling A Belligerent Beneficiary, Major Phase Of An Estate, personal possessions, Will

Having to confront a belligerent beneficiary is an awful position for an executor. Unfortunately for executors, beneficiaries have rights to an estate that executors must respect. As a result, an executor must try to handle a belligerent beneficiary as described in the article How to Handle a Belligerent Beneficiary. Conversely, if all efforts fail to appease the belligerent beneficiary, an executor may have to take action to move the estate forward.

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Moving the Personal Possessions Reserved for the Belligerent Beneficiary off the Estate

06 Monday Mar 2017

Posted by Robert Dowling in Estate

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Asset Settlement, Attorney, Beligerent Beneficiary, Closing, estate, Estate Administration, estate home, Estate Rental Property, Executor, Gifts, personal possessions, The Battle of the Shaving Mug

After the closing, it was time to move the personal possessions reserved for the belligerent beneficiary. Once the estate rental property closed, there were no remaining assets to settle. Therefore, the closing completed the asset settlement phase of the estate. At this point, I thought it would be a good time to wrap up business with the belligerent beneficiary. As described in the article How to Handle a Belligerent Beneficiary, I sent an email to the belligerent beneficiary. The point of the email was to give the belligerent beneficiary one week to collect the reserved possessions, and that I would call the beneficiary to set the day of the exchange. After sending the email, I was hopeful that the belligerent beneficiary would accept the reserved personal possessions. Moreover, by accepting the personal possessions, the possessions reserved for the belligerent beneficiary would finally be removed from the estate.

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The Common Executor

~ A Journey into Estate Administration

The Estate Income Tax Returns: The Plan to Complete the Returns

The Cleanup of the Decedent’s Home Office and the Final Task

How to Prepare the Federal Estate Income Tax Return

Track the Administration Expenses of the Estate

Handling Found Property from a Different Estate

List Your Beneficiaries Wisely in Your Estate Plan

When is the Right Time to Confront a Belligerent Beneficiary?

Moving the Personal Possessions Reserved for the Belligerent Beneficiary off the Estate