Estate Tax Return, Trust Income Tax Return & Gift Tax Return Services

Providing tax consultation and filing service to keep you in compliance for:

• Estate Tax Returns
• Estate Income Tax Returns
• Trust Income Tax Returns
• Gift Tax Returns
• Complex Individual Tax Returns

About Deceased Taxpayers & Estate Income Tax

There are two kinds of taxes owed by an estate: One on the transfer of assets from the decedent to their beneficiaries and heirs (the estate tax), and another on income generated by assets of the decedent’s estate (the income tax).  When someone dies, their assets become property of their estate. Any income those assets generate is also part of the estate and may trigger the requirement to file an estate income tax return. Examples of assets that would generate income to the decedent’s estate include savings accounts, CDs, stocks, bonds, mutual funds and rental property. IRS Form 1041, U.S. Income Tax Return for Estates and Trusts, is required if the estate generates more than a fixed amount of annual gross income.

The decedent and their estate are separate taxable entities. Before filing Form 1041, you will need to obtain a tax ID number for the estate. An estate’s tax ID number is called an “employer identification number,” or EIN.  Please contact us for assistance to obtain an ID number.

A decedent's estate figures its gross income in much the same manner as an individual. Most deductions and credits allowed to individuals are also allowed to estates and trusts. However, there is one major distinction. A trust or decedent's estate is allowed an income distribution deduction for distributions to beneficiaries. Income distributions are reported to beneficiaries and the IRS on Schedules K-1 (Form 1041).

For calendar year estates and trusts, file Form 1041 and Schedule(s) K-1 on or before April 15 of the following year. For fiscal year estates and trusts, file Form 1041 by the 15th day of the 4th month following the close of the tax year. If more time is needed to file the estate return, let us help you submit an application for an automatic 5-month extension of time to file.

In general, an estate must pay quarterly estimated income tax.  Contact us for more information about when estimated tax payments are required and how to make estimated tax payments for an estate.  Estate tax on the transfer of assets from the decedent to beneficiaries and heirs is reported on IRS Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return.

In Rhode Island, Forms RI-100 and RI-100A are no longer used to file an estate tax return. Beginning January 1, 2022, all estates of a decedent dying on or after 01/01/2015 are required to use the Form RI-706, "Estate Tax Return".

Form T-77 – Discharge of Lien Form: Must be filed along with Form RI-706 if the decedent had any interest in real estate located in Rhode Island.The description of the real estate must be stated as the tax assessor’s description. This description is found on the property tax bill
issued by the city or town.

Form T-79 – Estate Tax Waiver Form form: Must be filed along with Form RI-706 if the decedent had any interest in a Rhode Island security. Examples of Rhode Island securities requiring a Waiver are Rhode Island incorporated stock, Rhode Island state and municipal bonds and mutual funds organized as business trusts that do business in Rhode Island.

Over the phone or face to face, let's arrange a time to discuss your needs and how we can help you remain in compliance for tax reporting. Please contact us for more info.