Saturday, January 23, 2010

Do i have to file personal and estate taxes form my parents?

My dad passed in may 2008 and my mom nov 2008, 59 and 58. I am the executor. The estate is currently in probate. I have a lawyer to help me with the estate taxes but don't know about personal taxes.Do i have to file personal and estate taxes form my parents?
Yes, personal tax returns must be filed. You may either do it yourself, pay the lawyer to do it, or pay someone else to do it.Do i have to file personal and estate taxes form my parents?
You are now a fiduciary. Technically your father needs to file a personal 1040 for 1/1/08 to 5/31/08 and a 1041(fiduciary tax return) from 6/1/08 to 12/31/08.





Since you lost your Mom so late in the year maybe you could file just a 1040 but of course a lot depends on how much income was generated.





If your parents gross estates were less than a specific amount $3.5 million in 2008 you will not need to file a Federal Estate Tax Return.





States are different and you will need to check your specific states inheritance laws





Your attorney will help you with personal taxes too.





Here is some important advice so pay attention. Attorney's can charge a percentage of the estate...or a negotiated amount.





If I had a large estate that was complicated I would expect an attorney to be properly compensated but if an estate of the same size was really simple then he could overcharge. Take the $3.5 million as an example. I would pay 10% if it had businesses in it and was really complicated but I would not want to pay 10% if it was only stocks and was very simple.....So negotiate with him...Frequently attorneys take home more than do the beneficiaries
better get a CPA - not many people can figure out estate taxes on their own

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