Death and Taxes: How is the IRS Involved after a Decedent’s Death?

IRSA personal representative has the responsibility to pay amounts owed by the decedent or the estate to the IRS. 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 those taxes if they are not properly paid.

Estate planning in Florida1. The 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.

2. 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.”

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

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

• One 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. For help or answers to estate-related questions, you can contact BaskinFleece at 727.572.4545.

This blog is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Some of the content of this information 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 Because the law is continually changing, some provisions in this blog may be out of date.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.

How is the IRS Involved after a Decedent’s Death?

Taxes after deathTaxes after a decedent's deathA personal representative has the responsibility to pay amounts owed by the decedent or the estate to the IRS. 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 those taxes if they are not properly paid.

1. The 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.

2. 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.”

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

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

• One 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. For help or answers to estate-related questions, you can contact BaskinFleece at 727.572.4545.

This blog is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Some of the content of this information 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.

 

Joint Account or Power of Attorney?

Colleen-VideoButtonThe moment a parent puts you on their bank account as a joint owner, your parent effectively made a gift to you of one-half of the value of the account. If the gift to you is more than $14,000 (meaning the account is more than $28,000), then your parent effectively just made a taxable gift to you, and the gift should be reported to the IRS. Also, one-half of this account is now part of your legal assets, and if for what ever reason there is a legal judgment or lien against your assets, or you are going through a divorce, your one-half share of the account is vulnerable to your creditors and divorce proceedings. Learn more about Joint Accounts and how a Power of Attorney can solve a lot of potential issues from attorney Colleen Carson’s three and a half minute video below called, “Joint Account or Power of Attorney?”

 

This blog/video is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Estate Planning: Can a Will Reduce Income Taxes?

Attorneys are best to handle assets from a trust

A well-drawn will can reduce estate and income taxes that may arise when someone dies. Estate taxes are often by far the largest cash expense an estate can have. There is also the possibility that Congress may increase the impact of the estate tax in the future. In addition, proper planning must be made for income tax advantages. Proper estate planning with a will is indispensable in taking these benefits in the tax codes. For help or answers to will and estate related questions, you can contact BaskinFleece at 727.572.4545.

 

The content of this information 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.

$590.5M Powerball Winner is Gloria C. MacKenzie of Zephyrhills, Florida.

Powerball winner, Gloria C. MacKenzie, a retiree from Maine, arrived at the Florida lottery headquarters in Tallahassee to claim the largest single lottery jackpot of $590 million dollars in LotteryWinnerAmerican history. The lump sum payout was $370.9 million and after $92M in taxes, she takes home $278 million dollars! Gloria MacKenzie purchased the winning ticket at a Publix supermarket in Zephyrhills, Florida. She arrived to validate her winning ticket with her son Scott, a family friend and her financial and legal advisors.

If you need help in estate planning, you can contact BaskinFleece at 727.572.4545.

Because the law is continually changing, it is always best to consult an attorney about your legal rights and responsibilities in your particular case.

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The Estate, Taxes and the IRS.

The Estate, Taxes and the IRSThe 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.

• One 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 estate related returns not specifically mentioned here. The personal representative has the responsibility to pay amounts owed by the decedent or the estate to the IRS. 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 those taxes if they are not properly paid.

The 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.

Some of the content of this information 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.

 For help or answers to estate, taxes and the IRS related to estates questions, you can contact BaskinFleece at 727.572.4545.

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Who gets involved in the probate process?

Summary Administration

Depending upon the facts of the situation, any of the following six may have a role to play in the probate administration of the decedent’s estate:

1. Personal representative (or executor).

2. Attorney providing legal advice to the personal representative throughout the probate process.

3. Clerk of the circuit court in the county in which the decedent was domiciled at the time of the decedent’s death.

4. Circuit court judge.

5. Those filing claims in the probate proceeding relative to debts incurred by the decedent during his or her lifetime, such as credit card issuers and health care providers.

6. Internal Revenue Service (IRS), as to any federal income taxes that the decedent may owe, any income taxes that the decedent’s probate estate may owe, and, sometimes as to federal gift, estate or generation-skipping transfer tax matters.

If you need probate help, BaskinFleece can be contacted at 727.572.4545.

The informational text at the top of the blog 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.
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