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What tax documents must the representative of an estate file? 

On Behalf of | Jul 4, 2022 | Estate Administration & Probate |

Many estate administration responsibilities fall directly to the personal representative of the estate. They have to notify creditors and repay debts. They will also need to handle tax responsibilities on behalf of the deceased. Estate taxes only apply to multi-million dollar estates, but they are not the only taxes the representative of an estate must address. There are also income taxes to consider. 

There are two different kinds of income tax returns that the representative of a New York estate may need to file. If you fail to file the right papers and retain the necessary funds to cover tax liabilities, you could have personal responsibility for those oversights. 

Understanding the tax obligations involved in probate administration can help you avoid mistakes that could lead to personal liability. 

The decedent’s last tax return

One of your most important obligations is the requirement to file a final tax return on behalf of the deceased. Even if they had no income in the last few years of their life, you must still file their last return so that the IRS can update their records and you can ensure that you fully pay their tax obligations. 

Income tax returns for the estate

When the testator left instructions for the sale of estate assets, that could trigger additional tax responsibilities. Provided that the estate generates $600 or more in revenue from the sale of estate assets, the personal representative will need to file an income tax return for the estate itself and pay taxes on the proceeds of those sales. 

Familiarizing yourself with the duties of estate administration can help you fulfill your responsibilities efficiently, and without unnecessary complications — legal or otherwise.