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Probate, taxes and your job as executor for the decedent

Let us say that your favorite aunt named you as the executor of her estate. Aunt Lucy passed away suddenly, and her estate must now go through the probate process.

Your responsibility in administering your aunt’s estate includes paying outstanding debts and filing taxes. As to the latter, you may run into a problem that requires legal help.

The background on probate taxes

A probate tax applies to the assets left behind when Aunt Lucy died. It is imposed on every estate with a value of more than $15,000. The court in the county where your aunt died will handle the probate tax matter, but your responsibility will be to file the taxes. In terms of significance, two things will happen: The probate tax will either end Lucy’s last tax year to file her income taxes, or, for tax purposes, it will create a new entity.

Final returns

You will file your aunt’s final income tax return much the same way she filed returns during her life. You will either use Form 1040 or one of the simple forms, such as 1040-A or 1040-EZ, if the deceased qualifies. Her individual tax return is due for the year of her death. You will submit payment with the return for any taxes owed. If you find you cannot pay the full amount, the IRS may help you with a payment plan.

Earlier taxes due

Remember that as executor, you are legally responsible for all aspects of administering your aunt’s estate. You will need to find out if she owed taxes for any years prior to the year of her death. It will be your obligation to clear up these tax matters. You cannot afford to make any missteps in this regard, so do not hesitate to request help. Legal guidance is important for executors, and your aunt no doubt felt that with respect to taxes, as with other estate matters, you would discharge your obligation conscientiously.

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