HOW IS THE INTERNAL REVENUE SERVICE (“IRS”) INVOLVED?
For federal income tax purposes, death triggers two things. It ends the decedent’s last tax year for purposes of filing a federal income tax return, and it establishes a new tax entity, the “estate.” The personal representative may be required to file the following returns, depending on income of the decedent, income of the estate and size of the estate: • Final Form 1040 income tax return, reporting income for the decedent’s final tax year. • One or more Form 1041 income tax returns for the estate, reporting income for the estate. • Form 709 gift tax return(s), reporting certain gifts made by the decedent prior to death. • Form 706 estate tax return, reporting the gross estate and deductions, depending upon the value of the gross estate The personal representative may be required to file other returns. Additionally, the personal representative has the responsibility to deal with issues arising from tax years prior to the decedent’s death (including tax returns that were filed by the d
