I am one of 4 heirs to my aunt's estate. My cousin is executor and handling all the paperwork. The estate value is about $275,000. Does the estate pay income tax AND estate tax, or is estate tax part of the income tax return that is to be filed? My cousin is pretty close mouthed about all of this...he is a CPA, and knows what he's doing, but I am just trying to figure out how much I might end up with. I know there is something called "unified deduction" that is deducted from the calculated estate tax. Anybody in the know, please reply. This is in Michigan. The attorney on the case charges big bux just to answer a question, so I can't call him.
2007-03-21 22:19:55 · 4 answers · asked by grumpyoldlady 3 in Business & Finance ➔ Taxes ➔ United States
Most estates of less than $2 million will not owe estate taxes. The estate tax return is filed using Form 706.
Estates can file income tax returns, if the estate earns income. The estate income tax return is filed using Form 1041.
2007-03-21 22:30:58 · answer #1 · answered by ninasgramma 7 · 3⤊ 0⤋
To figure out what you'd end up with is all dependent upon your aunt's last will and testament. Being one of 4 heirs does not mean you are going to collect 25% of her estate.
The "unified deduction" is not applicable in this case. Your aunt did not leave
a taxable estate.
Just becaude the estate's attorney charges big "bux", does not mean he will charge you for the information. Let him charge the estate to answer your question.
As a beneficiary of the estate, you are entitled to know whats going on. If the attorney is uncooperative with you, it might be because of your aunt's last wishes - or something else entirely.
As an alternative, you should consult with an attorney specializing in estate law and have him represent your interests in the estate.
2007-03-22 05:38:32 · answer #2 · answered by bold4bs 4 · 0⤊ 0⤋
Doesn't seem large enough to be subject to any tax except for any income the estate would earn in the year your aunt died. If your aunt had some investments, stocks, bonds, cd's, etc. and those investments made income, the estate will file a final tax return for your aunt and pay that tax due, then divide the remaining value between the heirs.
2007-03-22 00:11:55 · answer #3 · answered by Jo Blo 6 · 1⤊ 0⤋
No estate tax for that value. For income tax the estate will file a Form 1041. If you received any distributions in 2006 you need a Schedule K-1 to do your 1040. The 1041 due date is 4/15 so it may come late and cause you problems so call him now.
2007-03-22 14:58:47 · answer #4 · answered by spicertax 5 · 0⤊ 1⤋