Announcement

Collapse
No announcement yet.

Can Furneral Exps be deducted on form 1041?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Can Furneral Exps be deducted on form 1041?

    Estate under $300K so I understand file form 1041 vs 706 but I see no place to enter Funeral related exps? I sure am not going to file both a 1041 and 706, I am I?

    #2
    No, funeral expenses are not deductible on Form 1041. Form 1041 is filed only if gross taxable income exceeds $600 during the estate tax year, although sometimes its a good idea to file anyway if losses are to pass through to the beneficiaries. It has nothing to do with the overall value of the Estate.

    Form 706 is filed if the value of the Estate exceeds $5,340,000 (for 2014). This includes everything the decedent owned, plus life insurance proceeds, the future value of annuities, etc. Also, sometimes Form 706 is filed to preserve the unused exemption amount for a spouse, even if the Estate valuation does not exceed $5,340,000. (See "portability.")

    So it is possible in some cases to be required to file both forms. 706 is due 9 months after death. 1041 is due at the end of the estate year.
    Last edited by Burke; 02-28-2015, 02:59 PM.

    Comment


      #3
      How did the IRS determine which form to use?

      The PR/heir/parent requested and received the SS-4 letter from the IRS with the Estates EIN. The IRS letter stated to use form 1041. I assume the IRS based the form on how the PR answered the questions. So I guess the Funeral exps never get to be deducted?

      Comment


        #4
        Yes, on the IRS tax letter for the EIN. The EIN was produced at the request of the administrator who applied for it and checked the box for an estate income tax return. An EIN is not required simply for an Estate Tax Return, Form 706. Note that it uses the decedent's SSN. But, realistically, such a large estate would certainly have taxable income exceeding $600 that would require a 1041 in almost every case. Funeral expenses ARE a deduction on Form 706.
        Last edited by Burke; 02-28-2015, 03:35 PM.

        Comment

        Working...
        X