Does My Deceased Parent’s Estate Need to File a Tax Return?

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If the estate has more than $600 in gross income, not profit, then generally the answer is Yes. Use Form 1041 to report income and expenses. 

Obviously if the estate will owe inheritance or “death” taxes, it will need to file a return and pay any amounts due. Use Form 706 to report the value of the estate and calculate any inheritance tax. Generally, the estate must have a value > $5.5 million for individuals and $11 million for couples before death taxes become an issue. These amounts are indexed to inflation, so they typically racket up each year.

Beware, some states also have an inheritance tax!

10/21/2019
By: Gary Grottke, CPA, Quality Back Office LLC