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DEATH OF A TAXPAYER

Upon the death of a taxpayer, a personal representative (e.g., estate executor/executrix) takes charge of the decedent's property. This person may be named in the decedent's will or appointed by the court if there is no will. The duties of the representative include collecting all of the decedent's property, paying creditors, and distributing assets to the heirs. In addition, the representative is responsible for filing various tax returns and seeing that the taxes owed are properly paid. This section will provide an overview of some the commonly encountered issues to be resolved upon the death of a taxpayer.

Did the Decedent Own Capital Assets?: If the decedent owned capital assets, the fair market value (FMV) of those assets at the time of death must be determined for estate and probate purposes and for determining the basis of the assets in the hands of the beneficiary.FMV is determined as...
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Is a Fiduciary Return Required?: Generally, income attributable to a decedent up to the time of death is included in the decedent's final individual tax return. Upon death, income that would have been attributable to the decedent is now income to the decedent's estate and reported on...
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Final Return of the Decedent: Generally, the same filing requirements apply to a deceased taxpayer as would otherwise be used if the taxpayer were still living, based on income level, age, and filing status. CAUTION: A fiduciary return may also be required. Refunds - If a decedent's...
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Returns That Need To Be Filed: The following are the basic returns that may need to be filed following a taxpayer's death, dependent on the filing requirements of each:Form 1040 - File the decedent's final return as usual on Form 1040, 1040A, etc.Form 1041 - This is the income tax...
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Was Decedent Receiving Social Security Benefits?: A family member or other person responsible for the beneficiary's affairs should do the following: Promptly notify Social Security of the beneficiary's death by calling Social Security Administration toll-free at 1-800-772-1213. If monthly benefits...
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Surviving Spouse Remarries in Same Year: If a deceased taxpayer was married at the time of death, the deceased taxpayer will have two filing options: File a joint return with the surviving spouse, or File as a married taxpayer filing a separate return. If the surviving spouse remarries before...
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