FAQ Friday: Tax Returns needed for Estates
On Friday, February 10th, Ms. Horn describes which tax returns are needed for estates.
The Personal Representative is responsible for all tax returns that need to be filed for the estate.
If your family member passed away in 2022, then you will need to file a personal income tax return just like anyone whom is alive needs to do.
You might also need to file an estate tax return if the estate in Maryland is more than $5 million dollars. Estates can include probate and non-probate assets. One asset commonly missed in that calculation is life insurance.
The portability can allow transferring assets between spouses to assist in this burden.
A fiduciary return can include an example of the estate having stocks and bonds and the representative needing to sell these assets. When there is more than $600 in income from dividends etc. then a fiduciary return would need to be filed.
Sometimes when a decedent owns a house and the value is assessed at a certain amount and sold at that same amount, there isn’t a gain. However, this can be misconstrued by the IRS when the title company sends a 1099 showing the sale. A fiduciary return would be necessary in this situation to show the date of death value and all expenses related to the sale.
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