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Frequently Asked Tax Questions

Other (Alternative Minimum Tax, Estates, Trusts, Tax Shelters, State Tax Inquiries) - MISC Estates & Tax Shelters

  1. How do I deduct the administration expenses of my father's estate?
  2. How can I recognize an abusive tax shelter?
  3. The IRS corrected my return and sent me an additional refund. Does this mean I am also entitled to an additional refund on my state tax return?
  4. How do I deduct the administration expenses of my father's estate?

Rev. date: 9/19/2011

How do I deduct the administration expenses of my father's estate?


Rev. date: 2/9/2011

How can I recognize an abusive tax shelter?

The IRS allows taxpayers to minimize their tax liability through legitimate investment, but will not allow a shelter which is "abusive."
Tax shelters reduce current tax liability by offsetting income from one source with losses or deductions from another source.
An abusive tax shelter:
There is current information on irs.gov covering abusive tax shelters including:

Rev. date: 2/9/2011

The IRS corrected my return and sent me an additional refund. Does this mean I am also entitled to an additional refund on my state tax return?

Whether you are entitled to an additional state tax refund depends on the change that was made to your federal return. For example, if you used the wrong line on the tax tables to figure your tax on your Federal tax return, this may not have an impact on your state tax return.  If, however, the change was made to the amount of your taxable income, it may have an impact on your state tax return.
Contact your state tax office for additional information. It is helpful to have a copy of your tax returns (federal and state) and a copy of the IRS notice when you call.  For contact information for the tax office of the state you need to contact, please go to our Alphabetical State Index.
Additional Information
Alphabetical State Index

Rev. date: 3/22/2011

How do I deduct the administration expenses of my father's estate?

 
• Expenses of administering an estate can be deducted either from the gross estate in figuring the federal estate tax on Form 706 (PDF), United States Estate (and Generation-Skipping Transfer) Tax Return, or from the estate's gross income in figuring the estate's income tax on Form 1041 (PDF), U.S. Income Tax Return for Estates and Trusts.
• However, these expenses cannot be claimed for both estate tax and income tax purposes.
• In most cases this rule also applies to expenses incurred in the sales of property by the estate. For more information, refer to Publication 559, Survivors, Executors, and Administrators, designed to help those in charge of the property (estate) of an individual who has died. Also, refer to Publication 950, Introduction to Estate and Gift Taxes.
• In general, administration expenses deductible in figuring the estate tax include: fees paid to the fiduciary for administering the estate; attorney, accountant, and return preparer fees; expenses incurred for the management, conservation, or maintenance of property; expenses in connection with the determination, collection, or refund of the estate's tax liability.
• The estate tax has been repealed for decedents dying in 2010.  No estate tax is due and there is no need to file a Form 706.  For more information, refer to the following article:  2010 Brings Big Changes to the Estate and Gift Tax.
  Additional Information:
• Publication 559, Survivors, Executors, and Administrators
• Publication 950, Introduction to Estate and Gift Taxes
• Estates
• 2010 Brings Big Changes to the Estate and Gift Tax