When a deceased’s estate enters probate court, the judge could appoint someone to represent it or serve as its administrator. It is a significant role with various responsibilities concerning the estate, including tax-related duties concerning the deceased and the estate.
Once appointed, the estate administrator must accomplish preliminary tasks to determine the deceased’s assets and debts. They must also contact the Internal Revenue Service (IRS) to file a proof of claim. Then, the court will give the estate administrator a document authorizing them to complete tasks for the deceased and the estate, such as filing tax returns.
The estate’s representative would need specific documents to perform their tax-related duties, including income documentation and transcripts. Then, they could continue processing the following:
- The deceased’s income tax returns: This concerns the individual tax returns. The administrator could use varying forms based on the situation. They would need to cover the deceased’s year of death and other prior years with unfiled tax returns.
- The estate’s income tax returns: This process pertains to the estate’s income tax returns using Form 1041. The process could vary depending on the estate’s income. The administrator must obtain the estate’s identification number to proceed.
- Estate tax returns: This tax return is relevant to transferring assets to the deceased’s beneficiaries and heirs. It might only be appropriate for large estates.
Still, some procedures might change depending on the circumstances.
Estate administration is a challenging job
These tax-related tasks are just part of the estate administrator’s responsibilities. They must also inventory the deceased’s assets, pay off creditors and distribute the estate while keeping beneficiaries updated about the process. They might also have deadlines based on the standard court process. These duties could be overwhelming, but they are all essential.