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3. The final return may also be subject to alternative minimum tax. 4. Withholding and estimated tax payments are credited the same for a decedent as would apply had death not occurred. H. Signing the Final Return - The word "deceased," the deceased's name, and the date of death should be written across the top of the tax return. If a personal representative has been assigned, that person must sign the return. If it is a joint return, the surviving spouse must also sign. If no personal representative has been assigned, a surviving spouse can sign and write in the signature area "Filing as surviving spouse." If not a joint return, the person in charge of the decedent's property must file and sign the return as "personal representative." I. Due Date - The final return for a decedent who was a calendar year taxpayer is due on or before April 15 following the year of death regardless of when during the year the taxpayer died.
IRS ENROLLED AGENT WORK BOOK PART 3 - CORPORATIONS, ESTATES, TRUSTS & GIFT TAXES Dynasty School ()3-48Exercise 30: John died on August18, 2001. All of the following statements are CORRECT except: A. John’s death does NOT close the tax year of the partnership in which he was partners before it normally ends. B. Medical expenses paid by John before his death are deductible on his final income tax return if deductions are itemized C. On John's final return, all income is reported on the accrual method of accounting regardless of the accounting method that John had employed D. Any tax credits that applied to John before his death may be claimed on his final income tax return. C. On John’s final return, all income is reported on the accrual method regardless of the accounting method John had employed. In computing income for the decedent’s last tax year, only amounts properly includible under the taxpayer’s method of accounting are included. IV. Form 1041, Income Tax Return of an Estate A. An estate is a separate taxable entity, formed on the date of death, and terminated when all assets are distributed. Any income earned during this period is subject to income tax and is reported annually on either a calendar year or fiscal year basis. The tax generally is computed in the same manner and on the same basis as for individuals. However, there is one major distinction. A trust or decedent's estate is allowed an income distribution deduction for distributions to beneficiaries. The computation is made on Schedule B of Form 1041. The income distribution deduction determines the amount of the distribution that is to be taxed to the beneficiary. B. Filing Requirements - Every domestic estate with gross income of $600 or more during a tax year, or with a beneficiary who is a nonresident alien, must file a Form 1041. The personal representative has the responsibility of filing a tax return and a Schedule K-1 for each beneficiary. A Schedule K-1 must also be given to each beneficiary on or before the date the Form 1041 is filed.
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Revenue, Taxation in the United States, ........., Dynasty School