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Phone: (856) 665-2121
Email: ron@taxesq.com


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Tax Attorney &
Estate Planning Lawyer


Estate Administration
Tax Responsibilities

The Executor and Administrator of an estate has the responsibility of filing Federal and State Income Tax, Estate Tax and Inheritance Tax returns.
  • If an estate must file income tax or estate tax returns, a federal employer identification number (EIN) must be obtained from the IRS.
  • The Executor should open an estate checking account. The account is opened with funds transferred from the decedent's accounts. The bank will require the estate's EIN. Place deposits from income earned by the estate into the Estate Checking Account. It is also used to to pay expenses, including outstanding bills, funeral and medical expenses, preliminary distributions, and state and federal taxes.
  • Federal and state income tax returns need to be filed;
  • Federal and state estate tax returns will have to be filed.

Income Tax

At death, the decedent's estate may take over ownership of some or all of the decedent's assets. If so, the estate will be taxed on its income under complicated IRS guidelines applicable to trusts.  This is the income tax for the estate, not the final income taxes of the decedent. These are both different than  federal estate tax.

Small estates (with gross income under $600) aren't required to file income tax returns. If you are in charge of an estate that must file, call Ronald J. Cappuccio, J.D., LL.M. (Tax) at (856) 665-2121 with this onerous chore because the tax law is very complex.

Estate Tax

The federal estate tax return is filed on Form 706.  Form 706 is due nine months after death, but the deadline can be extended up to six months. Remember: While life insurance proceeds are generally free of any income tax, they are usually included in the decedent's estate for estate tax purposes -- even if the money goes directly to policy beneficiaries. In fact, life insurance proceeds are the most common cause of unexpected estate tax bills. One other very important point: assets inherited by a surviving spouse are not included in the decedent's estate, as long as the surviving spouse is a U.S. citizen. This is called the unlimited marital deduction privilege and it's the most common reason why many large estates don't owe any federal estate tax.

If you are the executor of a substantial estate, preparing the Federal and Estate Tax Return  is one of your most important duties. The Estate Tax laws are in a constant state of change and can be confusing to most executors.
If you are in charge of an estate that must file an Estate Tax Return, call Ronald J. Cappuccio, J.D., LL.M. (Tax) at (856) 665-2121 .

Inheritance Tax

In addition to a tax on the Estate, many States have a separate tax based upon the relationship of the beneficiary to the decedent. For example, a transfer to a child may be exempt from Inheritance Tax  when the same transfer to a niece or nephew could be heavily taxed.

Reducing Tax

Even though  the decedent is dead, how the estate is administered, and the use of disclaimers can help lower taxes.  Tax and Estate attorneys call this "Post Mortem Estate Planning."  The earlier the tax attorney is brought into the process, the greater the help that can be given, Don't wait!