What are the income, estate and inheritance taxes issues with estate administration?
Death has significant tax consequences. The year of death marks the final tax year for filing an income tax return and a new tax entity is created — the estate of the decedent. Additionally, depending on the total value of the estate death taxes may be due. A final personal income tax return, Form 1040 is due on the date that the return would have been due had the death not occurred (typically April 15th) for the portion of the year that the decedent was alive. Additionally, to the extent the estate was taxable, Massachusetts and or federal estate tax return(s) must be filed, with payment made on any tax due within nine months. If more time is needed, an extension may be obtained but an estimated payment is required with the extension. In addition, income tax returns may be required for each year that the estate remains open. To read more about Massachusetts and federal estate tax exemption amounts, click here.
