Executor Fees

[TAXNJ]

Any assistance on Executor Fees?

I say that can be a Schedule C where applicable income and expenses to be reported.

Anyone agree? I cannot seem to find info in the TAXBOOK for treatment.

Thanks in advance

[JohnH]

Standard tax answer - "It depends"

Depends upon whether the person is a professional or nonprofessional executor, with a couple of exceptions:

Fees for being an executor, administrator or personal representative of an estate, unless you are engaged in the trade or business of being a professional executor, administrator, or personal representative. Fees for a nonprofessional are reported as other income on Form 1040 unless (1) the estate requires extensive managerial activities on your part for a long period of time and the activities may rise to the level of a trade or business, or (2) the estate includes an active trade or business in which you actively participate and the fee is for the operation of that trade or business. Fees for a professional executor, administrator, or personal representative (one who is engaged in the trade or business) are reported on Schedule C.

http://www.irs.gov/taxtopics/tc426.html

[OtisMozzetti]

Fees for Executors - The Tax Book 2007 1040 ed.

p. 3-19 of The Tax Book 2007 1040 ed., under "Fees for Notaries, Fiduciaries, Election Workers, Corporate Directors":

...
NONPROFESSIONAL FIDUCIARIES. Taxpayers who serve as executors, personal representatives and other fiduciaries for friends or family members report fees on line 21, Form 1040, not subject to self-employment tax. Fees are not taxable if waived.


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If the executor is a professional fiduciary, then that's going to go to Schedule C or other form of business.

[TAXNJ]

What to do with expenses ?

What does one do with the expenses incurred by the Executor?

If the Executor is not a professional and would report the "Gross" fee on line 21 "Other Income" - would they show it net with a note showing gross less expenses?

Thanks

[JG EA]

Pub 559 says "All personal representatives must include in their gross income fees paid to them from an estate."

I can't find a definition of "fees" but here is what I think. If a flat fee then that is what you report. If a fee is paid (and no inheritance is received) but there are direct expenses to fulfill your job as executor then I would take the expenses out.

If an inheritance is received by the executor and the expenses have to do with paying bills, etc. I would take those expenses as belonging to the inheritance and not the fee.

[JON]

Reimbusement

Get all expenses reimbursed by the estate.