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           Department of the Treasury                         Contents
           Internal Revenue Service
                                                              Reminders    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
                                                              Introduction   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
Publication 559
Cat. No. 15107U                                               Personal Representative            . . . . . . . . . . . . . . . . . . . .   3
                                                              Duties       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
                                                              Fees Received . . . . . . . . . . . . . . . . . . . . . . . . . .            5
Survivors,                                                    Final Income Tax Return for Decedent—Form 
                                                              1040 or 1040-SR . . . . . . . . . . . . . . . . . . . . . . . .              5
                                                              Name, Address, and Signature                   . . . . . . . . . . . . . .   5
Executors, and 
                                                              When and Where To File . . . . . . . . . . . . . . . . . . .                 5
                                                              Filing Requirements            . . . . . . . . . . . . . . . . . . . . . .   5
Administrators                                                Income To Include            . . . . . . . . . . . . . . . . . . . . . . .   6
                                                              Deductions         . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
For use in preparing                                          Credits, Other Taxes, Payments . . . . . . . . . . . . . .                   9
                                                              Tax Forgiveness for Armed Forces Members, 
2023 Returns                                                  Victims of Terrorism, and Astronauts                       . . . . . . .     10
                                                              Filing Reminders           . . . . . . . . . . . . . . . . . . . . . . .     12
                                                              Other Tax Information        . . . . . . . . . . . . . . . . . . . . . .     13
                                                              Tax Benefits for Survivors             . . . . . . . . . . . . . . . . .     13
                                                              Income in Respect of Decedent . . . . . . . . . . . . .                      13
                                                              Deductions in Respect of Decedent . . . . . . . . . .                        17
                                                              Estate Tax Deduction             . . . . . . . . . . . . . . . . . . . .     17
                                                              Gifts, Insurance, Inheritances               . . . . . . . . . . . . . .     18
                                                              Other Items of Income . . . . . . . . . . . . . . . . . . . .                21
                                                              Income Tax Return of an Estate—Form 1041 . . . .                             22
                                                              Filing Requirements            . . . . . . . . . . . . . . . . . . . . .     22
                                                              Income To Include            . . . . . . . . . . . . . . . . . . . . . .     24
                                                              Exemption and Deductions                 . . . . . . . . . . . . . . . .     25
                                                              Credits, Tax, and Payments . . . . . . . . . . . . . . . .                   29
                                                              Name, Address, and Signature                   . . . . . . . . . . . . .     30
                                                              When and Where To File . . . . . . . . . . . . . . . . . .                   30
                                                              Distributions to Beneficiaries . . . . . . . . . . . . . . . .               31
                                                              Currently Distributed Income . . . . . . . . . . . . . . .                   31
                                                              Other Amounts Distributed                . . . . . . . . . . . . . . . .     31
                                                              Discharge of a Legal Obligation . . . . . . . . . . . . .                    32
                                                              Character of Distributions             . . . . . . . . . . . . . . . . .     32
                                                              How and When To Report                 . . . . . . . . . . . . . . . . .     33
                                                              Bequest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          34
                                                              Termination of Estate            . . . . . . . . . . . . . . . . . . . .     35
                                                              Estate and Gift Taxes        . . . . . . . . . . . . . . . . . . . . . .     36
                                                              Gift Tax     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     37
                                                              Estate Tax       . . . . . . . . . . . . . . . . . . . . . . . . . . . .     39
                                                              Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      40
                                                              Final Return for Decedent              . . . . . . . . . . . . . . . . .     41
                                                              Income Tax Return of an Estate . . . . . . . . . . . . .                     42
                                                              Table A. Checklist of Forms and Due Dates . . . . .                          44
Get forms and other information faster and easier at:         Table B. Worksheet To Reconcile Amounts 
• IRS.gov (English)         • IRS.gov/Korean (한국어)            Reported in Name of Decedent                       . . . . . . . . . . .     45
• IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский) 
• IRS.gov/Chinese (中文)      • IRS.gov/Vietnamese (Tiếng Việt) How To Get Tax Help        . . . . . . . . . . . . . . . . . . . . . . .     46

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Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Introduction
This publication is designed to help those in charge (per-
Future Developments sonal representatives) of the property (estate) of an indi-
For the latest information about developments related to vidual who has died (decedent). It shows how to complete
Pub. 559, such as legislation enacted after it was and file federal income tax returns and explains their re-
published, go to IRS.gov/Pub 559. sponsibility to pay any taxes due on behalf of the dece-
dent. An example of the decedent's final tax return, Form
1040, U.S. Individual Income Tax Return, and the estate's
income tax return, Form 1041, U.S. Income Tax Return for
Reminders Estates and Trusts, are discussed in this publication.
The publication also explains how much money or
Net operating loss (NOL) carryback. Generally, an
property a taxpayer can give away during their lifetime or
NOL arising in a tax year beginning in 2021 or later may
leave to their heirs at their death, before any tax will be
not be carried back and instead must be carried forward
owed. A discussion of Form 709, United States Gift (and
indefinitely. However, farming losses arising in tax years
Generation-Skipping Transfer) Tax Return, and Form 706,
beginning in 2021 or later may be carried back 2 years
United States Estate (and Generation-Skipping Transfer)
and carried forward indefinitely.
Tax Return, is included.
For special rules for NOLs arising in 2018, 2019, or Also included in this publication are the following items.
2020, see Pub. 536, Net Operating Losses (NOLs) for In-
dividuals, Estates, and Trusts, for more information. • A checklist of the forms you may need and their due
dates.
Excess deductions on termination. Under Final
Regulations - TD9918, each excess deduction on termina- • A worksheet to reconcile amounts reported in the de-
tion of an estate or trust retains its separate character as cedent's name on information returns including Forms
an amount allowed in arriving at adjusted gross income W-2, Wage and Tax Statement; 1099-INT, Interest In-
(AGI), a non-miscellaneous itemized deduction, or a mis- come; 1099-DIV, Dividends and Distributions; etc. The
cellaneous itemized deduction. For more information, see worksheet will help you correctly determine the in-
the Instructions for Form 1041. come to report on the decedent's final return and on
Consistent treatment of estate and trust items. Bene- the return for either the estate or a beneficiary.

ficiaries must generally treat estate items the same way on Comments and suggestions. We welcome your com-
their individual returns as they are treated on the estate's ments about this publication and your suggestions for fu-
return. ture editions.
Consistent basis reporting between estate and per- You can send us comments through IRS.gov/
son acquiring property from a decedent. Certain ex- FormComments. Or, you can write to the Internal Revenue
ecutors are required to report the estate tax value of prop- Service, Tax Forms and Publications, 1111 Constitution
erty passing from a decedent to the IRS and to the Ave. NW, IR-6526, Washington, DC 20224.
recipient of the property (beneficiary). See Consistent Ba- Although we can’t respond individually to each com-
sis Reporting Requirement, later, for more information. ment received, we do appreciate your feedback and will
Filing status name changed to qualifying surviving consider your comments and suggestions as we revise
spouse. The filing status qualifying widow(er) is now our tax forms, instructions, and publications. Don’t send
called qualifying surviving spouse. The rules for the filing tax questions, tax returns, or payments to the above ad-
status have not changed. The same rules that applied to dress.
qualifying widow(er) apply to qualifying surviving spouse.
See Qualifying surviving spouse, later. Getting answers to your tax questions. If you have a
tax question not answered by this publication, or the How
Extension of time to elect portability. Effective July 8, To Get Tax Help section at the end of this publication, go
2022, Rev. Proc. 2022-32 provides a simplified method for to the IRS Interactive Tax Assistant page at IRS.gov/
certain estates to obtain an extension of time to file a re- Help/ITA where you can find topics by using the search
turn on or before the fifth anniversary of the decedent’s feature or by viewing the categories listed.
death to elect portability of the deceased spousal unused
exclusion (DSUE) amount. See Filing requirements, later, Getting tax forms, instructions, and publications. Go
for more information. to IRS.gov/Forms to download current and prior-year
Photographs of missing children. The Internal Reve- forms, instructions, and publications.
nue Service is a proud partner with the National Center for
Ordering tax forms, instructions, and publications.
Missing & Exploited Children® (NCMEC). Photographs of
Go to IRS.gov/OrderForms to order current forms, instruc-
missing children selected by the Center may appear in
tions, and publications; call 800-829-3676 to order
this publication on pages that would otherwise be blank.
prior-year forms and instructions. The IRS will process
You can help bring these children home by looking at the
your order for forms and publications as soon as possible.
photographs and calling 1-800-THE-LOST
(1-800-843-5678) if you recognize a child.

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Don’t resubmit requests you’ve already sent us. You can creditors, and distribute the remaining assets to the heirs
get forms and publications faster online. or other beneficiaries.
The personal representative must also perform the fol-
Useful Items lowing duties.
You may want to see:
• Apply for an employer identification number (EIN) for
Publication the estate.
3 3 Armed Forces' Tax Guide • File all tax returns, including income, estate, and gift
tax returns, when due.
Form (and Instructions) • Pay the tax determined up to the date of discharge
SS-4 SS-4 Application for Employer Identification Number from duties.
56 56 Notice Concerning Fiduciary Relationship Other duties of the personal representative in federal tax
matters are discussed in other sections of this publication.
1040 1040 U.S. Individual Income Tax Return If any beneficiary is a nonresident alien, see Pub. 515,
1040-SR 1040-SR U.S. Tax Return for Seniors Withholding of Tax on Nonresident Aliens and Foreign En-
tities, for information on the personal representative's du-
1041 1041 U.S. Income Tax Return for Estates and Trusts ties as a withholding agent.
706 706 United States Estate (and Generation-Skipping Penalty. There is a penalty for failure to file a tax return
Transfer) Tax Return when due unless the failure is due to reasonable cause.
709 709 United States Gift (and Generation-Skipping Reliance on an agent (attorney, accountant, etc.) isn't rea-
Transfer) Tax Return sonable cause for late filing. It is the personal representati-
ve's duty to file the returns for the decedent and the estate
1310 1310 Statement of Person Claiming Refund Due a when due.
Deceased Taxpayer
See How To Get Tax Help near the end of this publication Identification number. The first action you should take if
for information about getting publications and forms. Also you’re the personal representative for the decedent is to
near the end of this publication is Table A, a checklist of apply for an EIN for the estate. You should apply for this
forms and their due dates for the executor, administrator, number as soon as possible because you need to enter it
or personal representative. on returns, statements, and other documents you file con-
cerning the estate. You must also give the identification
number to payers of interest and dividends and other pay-
ers who must file a return concerning the estate.
Personal Representative You can get an EIN by applying online at IRS.gov/EIN.
Generally, if you apply online, you will receive your EIN im-
A personal representative of an estate is an executor, ad- mediately upon completing the application. You can also
ministrator, or anyone who is in charge of the decedent's apply using Form SS-4. Generally, if you apply by mail, it
property. Generally, an executor (or executrix) is named in takes about 4 weeks to get your EIN. See IRS.gov/
a decedent's will to administer the estate and distribute Businesses/Small-Businesses-&-Self-Employed/
properties as the decedent has directed. An administrator Employer-ID-Numbers-EINs for other ways to apply.
(or administratrix) is usually appointed by the court if no Payers of interest and dividends report amounts on
will exists, if no executor was named in the will, or if the Forms 1099 using the identification number of the person
named executor can't or won't serve. to whom the account is payable. After a decedent's death,
In general, an executor and an administrator perform Forms 1099 must reflect the identification number (EIN, in-
the same duties and have the same responsibilities. dividual identification number (ITIN), or social security
number (SSN)) of the estate or beneficiary to whom the
For estate tax purposes, if there is no executor or ad- amounts are payable. As the personal representative han-
ministrator appointed, qualified, and acting within the Uni- dling the estate, you must furnish this identification num-
ted States, the term “executor” includes anyone in actual ber to the payer. For example, if interest is payable to the
or constructive possession of any property of the dece- estate, the estate's EIN must be provided to the payer and
dent. It includes, among others, the decedent's agents used to report the interest on Form 1099-INT. If the inter-
and representatives; safe-deposit companies, warehouse est is payable to a surviving joint owner, the survivor's
companies, and other custodians of property in this coun- identification number, such as an SSN or ITIN, must be
try; brokers holding securities of the decedent as collat- provided to the payer and used to report the interest.
eral; and the debtors of the decedent who are in this coun- If the estate or a survivor may receive interest or divi-
try. dends after you inform the payer of the decedent's death,
the payer should give you (or the survivor) a Form W-9,
Duties

The primary duties of a personal representative are to col-
lect all the decedent's assets, pay the decedent’s

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Request for Taxpayer Identification Number and Certifica- and an earlier final distribution of the assets to the benefi-
tion, or a similar substitute form. Complete this form to in- ciaries.
form the payer of the estate's (or if completed by the survi-
Form 4810. Form 4810 can be used for making this re-
vor, the survivor's) identification number and return it to
quest. It must be filed separately from any other docu-
the payer.
ment.
Don't use the deceased individual's identifying As the personal representative for the decedent's es-
! number to file an individual income tax return after tate, you are responsible for any additional taxes that may
CAUTION the decedent's final tax return. Also don't use the be due. You can request prompt assessment of any of the
decedent's identifying number to make estimated tax pay- decedent's taxes (other than federal estate taxes) for any
ments for a tax year after the year of death. years for which the statutory period for assessment is
open. This applies even though the returns were filed be-
Penalty. If you don't include the EIN or the taxpayer fore the decedent's death.
identification number (TIN) of another person where it is
required on a return, statement, or other document, you Failure to report income. If you or the decedent
are liable for a penalty for each failure, unless you can failed to report substantial amounts of gross income (more
show reasonable cause. You are also liable for a penalty if than 25% of the gross income reported on the return) or
you don't give the TIN of another person when required on filed a false or fraudulent return, your request for prompt
a return, statement, or other document. assessment won't shorten the period during which the IRS
may assess the additional tax. However, such a request
Notice of fiduciary relationship. The term “fiduciary” may relieve you of personal liability for the tax if you didn't
means any person acting for another person. It applies to have knowledge of the unpaid tax.
persons who have positions of trust on behalf of others. It
generally includes a guardian, trustee, executor, adminis- Request for discharge from personal liability for tax.
trator, receiver, or conservator. A personal representative An executor can make a request for discharge from per-
for a decedent's estate is also a fiduciary. sonal liability for a decedent's income, gift, and estate
taxes. The request must be made after the returns for
Form 56. If you are appointed to act in a fiduciary ca- those taxes are filed. To make the request, file Form 5495.
pacity for another, you must file a written notice with the For this purpose, an executor is an executor or administra-
IRS stating this. Form 56 is used for this purpose. See the tor that is appointed, qualified, and acting within the Uni-
Instructions for Form 56 for filing requirements and other ted States.
information. Within 9 months after receipt of the request, the IRS will
File Form 56 as soon as all the necessary information notify the executor of the amount of taxes due. If this
(including the EIN) is available. It notifies the IRS that you, amount is paid, the executor will be discharged from per-
as the fiduciary, are assuming the powers, rights, duties, sonal liability for any future deficiencies. If the IRS hasn’t
and privileges of the decedent. The notice remains in ef- notified the executor at the end of the 9-month period, the
fect until you notify the IRS (by filing another Form 56) that executor will be discharged from personal liabilities.
your fiduciary relationship with the estate has terminated.
Even if the executor is discharged from personal
Termination of fiduciary relationship. Form 56 ! liability, the IRS will still be able to assess tax defi-
should also be filed to notify the IRS if your fiduciary rela- CAUTION ciencies against the executor to the extent the ex-
tionship is terminated or when a successor fiduciary is ap- ecutor still has any of the decedent's property.
pointed if the estate hasn't been terminated. See Form 56
and its instructions for more information. Insolvent estate. Generally, if a decedent's estate is in-
At the time of termination of the fiduciary relationship, sufficient to pay all the decedent's debts, the debts due to
you may want to file Form 4810, Request for Prompt As- the United States must be paid first. Both the decedent's
sessment Under Internal Revenue Code Section 6501(d), federal income tax liabilities at the time of death and the
and Form 5495, Request for Discharge From Personal Li- estate's income tax liability are debts due to the United
ability Under Internal Revenue Code Section 2204 or States. The personal representative of an insolvent estate
6905, to wind up your duties as fiduciary. See below for a is personally responsible for any tax liability of the dece-
discussion of these forms. dent or of the estate if the personal representative had no-
tice of such tax obligations or failed to exercise due care in
Request for prompt assessment (charge) of tax. The
determining if such obligations existed before distribution
IRS ordinarily has 3 years from the date an income tax re-
of the estate's assets and before being discharged from
turn is filed, or its due date, whichever is later, to charge
duties. The extent of such personal responsibility is the
any additional tax due. However, as a personal represen-
amount of any other payments made before paying the
tative, you may request a prompt assessment of tax after
debts due to the United States, except where such other
the return has been filed. This reduces the time for making
debt paid has priority over the debts due to the United
the assessment to 18 months from the date the written re-
States. Income tax liabilities need not be formally as-
quest for prompt assessment was received. This request
sessed for the personal representative to be liable if the
can be made for any tax return (except the estate tax re-
personal representative was aware or should have been
turn) of the decedent or the decedent's estate. This may
aware of their existence.
permit a quicker settlement of the tax liability of the estate

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Fees Received by Personal                                             family member, or any other person you choose. This al-
                                                                      lows the IRS to call the person you identified as the desig-
Representatives                                                       nee  to  answer  any  questions  that  may  arise  during  the 
                                                                      processing  of  the  return.  It  also  allows  the  designee  to 
All  personal  representatives  must  include  fees  paid  to 
                                                                      perform  certain  actions.  See  the  Instructions  for  Form 
them from an estate in their gross income. If you aren't in 
                                                                      1040 (and 1040-SR) for details.
the trade or business of being an executor (for instance, 
you are the executor of a friend's or relative's estate), re-         Signature. If a personal representative has been appoin-
port these fees on your Schedule 1 (Form 1040), line 8z. If           ted, that person must sign the return. If it is a joint return, 
you are in the trade or business of being an executor, re-            the surviving spouse must also sign it. If no personal rep-
port fees received from the estate as self-employment in-             resentative has been appointed, the surviving spouse (on 
come  on  Schedule  C  (Form  1040),  Profit  or  Loss  From          a joint return) signs the return and writes in the signature 
Business.                                                             area “Filing as surviving spouse.” If no personal represen-
If the estate operates a trade or business and you, as                tative  has  been  appointed  and  if  there  is  no  surviving 
executor, actively participate in the trade or business while         spouse, the person in charge of the decedent's property 
fulfilling  your  duties,  any  fees  you  receive  related  to  the  must file and sign the return as “personal representative.”

operation  of  the  trade  or  business  must  be  reported  as       Paid preparer. If you pay someone to prepare, assist in 
self-employment income on Schedule C (Form 1040).                     preparing, or review the tax return, that person must sign 
                                                                      the return and fill in the other blanks in the Paid Preparer 
                                                                      Use Only area of the return. See the Instructions for Form 
Final Income Tax Return for                                           1040 (and 1040-SR) for details.

Decedent—Form 1040 or 
                                                                      When and Where To File
1040-SR
                                                                      The final income tax return is due at the same time the de-
The personal representative (defined earlier) must file the           cedent's return would have been due had death not occur-
final income tax return (Form 1040 or 1040-SR) of the de-             red. A final return for a decedent who was a calendar year 
cedent for the year of death and any returns not filed for            taxpayer is generally due on April 15 following the year of 
preceding  years.  A  surviving  spouse,  under  certain  cir-        death,  regardless  of  when  during  that  year  death  occur-
cumstances, may have to file the returns for the decedent.            red. However, when the due date falls on a Saturday, Sun-
See Joint Return, later.                                              day, or legal holiday, the return is filed timely if filed by the 
                                                                      next business day.
Return for preceding year.   If an individual died after the          Generally,  you  must  file  the  final  income  tax  return  of 
close  of  the  tax  year,  but  before  the  return  for  that  year the decedent with the Internal Revenue Service Center for 
was filed, the return for the year just closed won't be the           the place where you live. A tax return for a decedent can 
final return. The return for that year will be a regular return       be electronically filed. A personal representative may also 
and the personal representative must file it.                         obtain an income tax filing extension on behalf of a dece-
Example.  S. Smith died on March 21, 2023, before fil-                dent.
ing the 2022 tax return. The personal representative must 
file the 2022 return by April 15, 2023. The final tax return          Filing Requirements
covering  the  period  from  January  1,  2023,  to  March  20, 
2023, is due April 15, 2024.                                          The  gross  income,  age,  and  filing  status  of  a  decedent 
                                                                      generally determine whether a return must be filed. Gross 
Note. See When  and  Where  To  File,  later,  if  the  due           income  is  all  income  received  by  an  individual  from  any 
date  falls  on  a  weekend  or  legal  holiday.  See  Pub.  509,     source  in  the  form  of  money,  goods,  property,  and  serv-
Tax Calendars, for a list of all legal holidays.                      ices that isn't tax-exempt. It includes gross receipts from 
                                                                      self-employment, but if the business involves manufactur-
Name, Address, and Signature                                          ing, merchandising, or mining, subtract any cost of goods 
                                                                      sold. In general, filing status depends on whether the de-
Write  the  word  “DECEASED,”  the  decedent's  name,  and            cedent  was  considered  single  or  married  at  the  time  of 
the date of death across the top of the tax return. If filing a       death. See the income tax return instructions or Pub. 501, 
joint return, write the name and address of the decedent              Dependents, Standard Deduction, and Filing Information.
and the surviving spouse in the name and address fields. 
If a joint return isn't being filed, write the decedent's name        Refund
in the name field and the personal representative's name 
and address in the address field.                                     A return must be filed to obtain a refund if tax was withheld 
                                                                      from salaries, wages, pensions, or annuities, or if estima-
Third  party  designee.  You  can  check  the  “Yes”  box  in         ted tax was paid, even if a return isn't otherwise required 
the Third Party Designee area on Form 1040 or 1040-SR                 to  be  filed.  Also,  the  decedent  may  be  entitled  to  other 
to authorize the IRS to discuss the return with a friend, a           credits that result in a refund. These advance payments of 

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tax  and  credits  are  discussed  later  under Credits,  Other   The income of the decedent that was includible on the de-
Taxes, and Payments.                                              cedent’s return for the year up to the date of death (see 
                                                                  Income To Include, later) and the income of the surviving 
Form  1310,  Statement  of  Person  Claiming  Refund              spouse  for  the  entire  year  must  be  included  on  the  final 
Due a Deceased Taxpayer.     Form 1310 doesn't have to            joint return.
be filed if you are claiming a refund and either of the fol-
lowing applies to you.                                            A final joint return with the decedent can't be filed if the 
• You are a surviving spouse filing an original or amen-          surviving spouse remarried before the end of the year of 
  ded joint return with the decedent.                             the decedent's death. The filing status of the decedent in 
                                                                  this instance is married filing a separate return.
• You are a court-appointed or certified personal repre-
  sentative filing the decedent’s original return and a           For information about tax benefits to which a surviving 
  copy of the court certificate showing your appointment          spouse  may  be  entitled,  see Tax  Benefits  for  Survivors, 
  is attached to the return.                                      later, under Other Tax Information.
  If the personal representative is filing a claim for refund 
                                                                  Personal representative may revoke joint return elec-
on  Form  1040-X,  Amended  U.S.  Individual  Income  Tax 
                                                                  tion. A  court-appointed  personal  representative  may  re-
Return,  or  Form  843,  Claim  for  Refund  and  Request  for 
                                                                  voke an election to file a joint return previously made by 
Abatement,  and  the  court  certificate  has  already  been 
                                                                  the surviving spouse alone. This is done by filing a sepa-
filed with the IRS, attach Form 1310 and write “Certificate 
                                                                  rate  return  for  the  decedent  within  1  year  from  the  due 
Previously Filed” at the bottom of the form.
                                                                  date of the return (including any extensions). The joint re-
  Example. E.  Green  died  before  filing  the  tax  return.     turn filed by the surviving spouse will then be regarded as 
You  were  appointed  the  personal  representative  for  E.      the separate return of that spouse by excluding the dece-
Green's  estate,  and  you  file  the  Form  1040  or  1040-SR    dent's items and refiguring the tax liability.
showing a refund due. You don't need Form 1310 to claim           Relief from joint liability.    In some cases, one spouse 
the refund if you attach a copy of the court certificate to       may be relieved of joint liability for tax, interest, and penal-
the  tax  return  showing  you  were  appointed  the  personal    ties  on  a  joint  return  for  items  of  the  other  spouse  that 
representative.                                                   were incorrectly reported on the joint return. If the dece-
    If  you  are  a  surviving  spouse  and  you  receive  a      dent qualified for this relief while alive, the personal repre-
TIP tax refund check in both your name and your de-               sentative can pursue an existing request, or file a request, 
    ceased spouse's name, you can have the check                  for relief from joint liability. For information on requesting 
reissued in your name alone. Return the joint-name check          this relief, see Pub. 971, Innocent Spouse Relief.
marked “VOID” along with Form 1310 to your local IRS of-
fice  or  the  service  center  where  you  mailed  your  return, Income To Include
along with a written request for reissuance of the refund 
check.  A  new  check  will  be  issued  in  your  name  and      The  decedent's  income  includible  on  the  final  return  is 
mailed to you.                                                    generally determined as if the person were still alive ex-
                                                                  cept that the tax period is usually shorter because it ends 
Death  certificate. When  filing  the  decedent's  final  in-     on the date of death. The method of accounting regularly 
come tax return, don't attach the death certificate or other      used by the decedent before death also determines the in-
proof of death to the final return. Instead, keep it for your     come includible on the final return. This section explains 
records and provide it if requested.                              how some types of income are reported on the final return.
                                                                  For  more  information  about  accounting  methods,  see 
Nonresident Alien                                                 Pub. 538, Accounting Periods and Methods.
If the decedent was a nonresident alien who would have 
                                                                  Cash Method
had to file Form 1040-NR, U.S. Nonresident Alien Income 
Tax Return, you must file that form for the decedent's final      If  the  decedent  accounted  for  income  under  the  cash 
tax year. See the Instructions for Form 1040-NR for the fil-      method,  only  those  items  actually  or  constructively  re-
ing requirements, due date, and where to file.                    ceived before death are included on the final return.

Joint Return                                                      Constructive receipt of income.    Interest from coupons 
                                                                  on the decedent's bonds is constructively received by the 
Generally,  the  personal  representative  and  the  surviving    decedent  if  the  coupons  matured  in  the  decedent's  final 
spouse can file a joint return for the decedent and the sur-      tax year but had not been cashed. Include the interest in-
viving  spouse.  However,  the  surviving  spouse  alone  can     come on the final return.
file the joint return if no personal representative has been      Generally,  a  dividend  is  considered  constructively  re-
appointed before the due date for filing the final joint return   ceived if it was available for use by the decedent without 
for the year of death. This also applies to the return for the    restriction.  If  the  corporation  customarily  mailed  its  divi-
preceding year if the decedent died after the close of the        dend checks, the dividend was includible when received. 
preceding tax year and before filing the return for that year.    If  the  individual  died  between  the  time  the  dividend  was 

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declared and the time it was received in the mail, the de- owner is the decedent's spouse. See the General
cedent didn't constructively receive it before death. Don't Instructions for Certain Information Returns for more infor-
include the dividend in the final return. mation on filing Forms 1099.

Accrual Method Partnership Income

Generally, under an accrual method of accounting, in- The death of a partner closes the partnership's tax year for
come is reported when earned. that partner. Generally, it doesn't close the partnership's
tax year for the remaining partners. The decedent's dis-
If the decedent used an accrual method, only the in- tributive share of partnership items must be figured as if
come items normally accrued before death are included the partnership's tax year ended on the date the partner
on the final return. died. To avoid an interim closing of the partnership books,
the partners can agree to estimate the decedent's distrib-
Interest and Dividend Income (Forms 1099) utive share by prorating the amounts the partner would
have included for the entire partnership tax year.
Form(s) 1099 reporting interest and dividends earned by
the decedent before death should be received and the On the decedent's final return, include the decedent's
amounts included on the decedent's final return. A sepa- distributive share of partnership items for the following pe-
rate Form 1099 should show the interest and dividends riods.
earned after the date of the decedent's death and paid to 1. The partnership's tax year that ended within or with
the estate or other recipient that must include those the decedent's final tax year (the year ending on the
amounts on its return. You can request corrected Forms date of death).
1099 if these forms don't properly reflect the right recipient
or amounts. 2. The period, if any, from the end of the partnership's
tax year in (1) to the decedent's date of death.
For example, a Form 1099-INT, reporting interest paya-
ble to the decedent, may include income that should be Example. M. Smith was a partner in XYZ partnership
reported on the final income tax return of the decedent, as and reported the income on a tax year ending December
well as income that the estate or other recipient should re- 31. The partnership uses a tax year ending June 30. M.
port, either as income earned after death or as income in Smith died August 31, 2023, and the estate established its
respect of the decedent (discussed later). For income tax year through August 31.
earned after death, you should ask the payer for a Form The distributive share of partnership items based on
1099 that properly identifies the recipient (by name and the decedent's partnership interest is reported as follows.
identification number) and the proper amount. If that isn't • Final Return for the Decedent—January 1 through Au-
possible, or if the form includes an amount that represents gust 31, 2023, includes XYZ partnership items from
income in respect of the decedent, report the interest as (a) the partnership tax year ending June 30, 2023; and
shown under How to report next. (b) the partnership tax year beginning July 1, 2023,
and ending August 31, 2023 (the date of death).
See U.S. savings bonds acquired from decedent under
Specific Types of Income in Respect of a Decedent, later, • Income Tax Return of the Estate—September 1, 2023,
for information on savings bond interest that may have to through August 31, 2024, includes XYZ partnership
be reported on the final return. items for the period September 1, 2023, through June
30, 2024.
How to report. If you are preparing the decedent's final
return and you have received a Form 1099-INT for the de- S Corporation Income
cedent that includes amounts belonging to the decedent
and to another recipient (the decedent's estate or another If the decedent was a shareholder in an S corporation, in-
beneficiary), report the total interest shown on Form clude on the final return the decedent's share of the S cor-
1099-INT on Schedule B (Form 1040), Interest and Ordi- poration's items of income, loss, deduction, and credit for
nary Dividends. Next, enter a subtotal of the interest the following periods.
shown on Forms 1099, and the interest reportable from
1. The corporation's tax year that ended within or with
other sources for which you didn't receive Forms 1099.
the decedent's final tax year (the year ending on the
Then, show any interest (including any interest you re-
date of death).
ceive as a nominee) belonging to another recipient sepa-
rately and subtract it from the subtotal. Identify the amount 2. The period, if any, from the end of the corporation's
of this adjustment as “Nominee Distribution” or other ap- tax year in (1) to the decedent's date of death.
propriate designation.
Report dividend income for which you received a Form Self-Employment Income
1099-DIV on the appropriate schedule using the same
procedure. Include self-employment income actually or constructively
Note. If the decedent received amounts as a nominee, received or accrued, depending on the decedent's ac-
you must give the actual owner a Form 1099, unless the counting method. For self-employment tax purposes only,

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the decedent's self-employment income will include the Accelerated Death Benefits
decedent's distributive share of a partnership's income or
loss through the end of the month in which death occur- Accelerated death benefits are amounts received under a
red. For this purpose, the partnership's income or loss is life insurance contract before the death of the insured indi-
considered to be earned ratably over the partnership's tax vidual. These benefits also include amounts received on
year. the sale or assignment of the contract to a viatical settle-
ment provider.
Community Income
Generally, if the decedent received accelerated death
If the decedent was married and domiciled in a community benefits on the life of a terminally or chronically ill individ-
property state, half of the income received and half of the ual, whether on the decedent’s own life or on the life of an-
expenses paid during the decedent's tax year by either the other person, those benefits aren't included in the dece-
decedent or spouse may be considered to be the income dent's income. For more information, see the discussion
and expenses of the other. For more information, see Pub. under Gifts, Insurance, and Inheritances, under Other Tax
555, Community Property. Information, later.

HSA, Archer MSA, or Medicare Advantage Deductions
MSA
Generally, the rules for deductions allowed to an individual
The treatment of an HSA (health savings account), an
also apply to the decedent's final income tax return. Show
Archer MSA (medical savings account), or a Medicare Ad-
on the final return deductible items the decedent paid (or
vantage MSA at the death of the account holder depends
accrued, if the decedent reported deductions on an ac-
on who acquires the interest in the account. If the dece-
crual method) before death. This section contains a de-
dent's estate acquires the interest, the fair market value
tailed discussion of medical expenses because the tax
(FMV) of the assets in the account on the date of death is
treatment of the decedent's medical expenses can be dif-
included in income on the decedent's final return. The es-
ferent. See Medical Expenses, later.
tate tax deduction, discussed later, doesn't apply to this
amount.
Standard Deduction
If a beneficiary acquires the interest, see the discussion
under Income in Respect of a Decedent, later. For other If you don't itemize deductions on the final return, the full
information on HSAs, Archer MSAs, or Medicare Advant- amount of the appropriate standard deduction is allowed
age MSAs, see Pub. 969, Health Savings Accounts and regardless of the date of death. For information on the ap-
Other Tax-Favored Health Plans. propriate standard deduction, see the Form 1040 and
1040-SR instructions or Pub. 501.
Coverdell Education Savings Account (ESA)
Medical Expenses
Generally, the balance in a Coverdell ESA must be distrib-
uted within 30 days after the individual for whom the ac- Medical expenses paid before death by the decedent are
count was established reaches age 30, or dies, whichever deductible, subject to limits, on the final income tax return
is earlier. The treatment of the Coverdell ESA at the death if deductions are itemized. This includes expenses for the
of an individual under age 30 depends on who acquires decedent, as well as for the decedent's spouse and de-
the interest in the account. If the decedent's estate ac- pendents.
quires the interest, the earnings on the account must be
Qualified medical expenses aren't deductible if
included on the final income tax return of the decedent.
paid with a tax-free distribution from an HSA or an
The estate tax deduction, discussed later, doesn't apply to CAUTION!
Archer MSA.
this amount. If a beneficiary acquires the interest, see the
discussion under Income in Respect of a Decedent, later.
Election for decedent's expenses. Medical expenses
The age 30 limitation doesn't apply if the individual for not paid before death are liabilities of the estate and are
whom the account was established or the beneficiary that shown on the federal estate tax return (Form 706). How-
acquires the account is an individual with special needs. ever, if medical expenses for the decedent are paid out of
This includes an individual who, because of a physical, the estate during the 1-year period beginning with the day
mental, or emotional condition (including a learning disa- after death, you can elect to treat all or part of the expen-
bility), requires additional time to complete the individual’s ses as paid by the decedent at the time they were incur-
education. red.
If you make the election, you can claim all or part of the
For more information on Coverdell ESAs, see Pub. 970, expenses on the decedent's income tax return (if deduc-
Tax Benefits for Education. tions are itemized) rather than on the federal estate tax re-
turn (Form 706). You can deduct expenses incurred in the
year of death on the final income tax return. You should file
an amended return (Form 1040-X) for medical expenses

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incurred in an earlier year, unless the statutory period for       deducted only on the decedent's final income tax return. 
filing a claim for that year has expired.                          See Pub. 536. You can't deduct any unused NOL or capi-
The amount you can deduct on the income tax return is              tal loss on the estate's income tax return.
the amount above 7.5% of AGI. Amounts not deductible 
because of this percentage can't be claimed on the fed-            Note.    Generally,  an  NOL  arising  in  a  tax  year  begin-
eral estate tax return.                                            ning in 2021 or later may not be carried back and instead 
                                                                   must be carried forward indefinitely. However, farming los-
Making  the  election.  You  make  the  election  by  at-          ses arising in tax years beginning in 2021 or later may be 
taching  a  statement,  in  duplicate,  to  the  decedent's  in-   carried back 2 years and carried forward indefinitely.
come tax return or amended return. The statement must 
state that you haven't claimed the amount as an estate tax         At-risk loss limits. Special at-risk rules apply to most ac-
deduction, and that the estate waives the right to claim the       tivities that are engaged in as a trade or business or for 
amount as a deduction. This election applies only to ex-           the production of income.
penses incurred for the decedent, not to expenses incur-           These rules limit the deductible loss to the amount for 
red to provide medical care for dependents.                        which the individual was considered at-risk in the activity. 
                                                                   An individual will generally be considered at-risk to the ex-
Example. R. Brown used the cash method of account-                 tent of the money and the adjusted basis of property that 
ing and filed the income tax return on a calendar year ba-         are  contributed  to  the  activity  and  certain  borrowed 
sis. R. Brown died on June 1, 2023, at the age of 78, after        amounts for use in the activity. An individual will be con-
incurring $800 in medical expenses. Of that amount, $500           sidered at-risk for amounts borrowed only if the individual 
was incurred in 2022 and $300 was incurred in 2023. R.             was personally liable for the repayment or if the amounts 
Brown itemized the deductions when the 2022 income tax             borrowed were secured by property other than that used 
return was filed. The personal representative of the estate        in  the  activity.  The  individual  isn't  considered  at-risk  for 
paid the entire $800 liability in August 2023.                     borrowed amounts if the lender has an interest (other than 
The  personal  representative  may  file  an  amended  re-         as a creditor) in the activity or if the lender is related to a 
turn  (Form  1040-X)  for  2022  claiming  the  $500  medical      person (other than the taxpayer) who has an interest in the 
expense  as  a  deduction,  subject  to  the  7.5%  limit.  The    activity. For more information, see Pub. 925, Passive Ac-
$300  of  expenses  incurred  in  2023  can  be  deducted  on      tivity and At-Risk Rules.
the final income tax return if deductions are itemized, sub-
ject  to  the  7.5%  limit.  The  personal  representative  must   Passive activity rules.  A passive activity is any trade or 
file a statement in duplicate with each return stating that        business activity in which the taxpayer doesn't materially 
these amounts have not been claimed on the federal es-             participate. To determine material participation, see Pub. 
tate tax return (Form 706), and waiving the right to claim         925.  Rental  activities  are  passive  activities  regardless  of 
such a deduction on Form 706 in the future.                        the  taxpayer's  participation,  unless  the  taxpayer  meets 
                                                                   certain eligibility requirements.
Medical expenses not paid by estate.      If you paid medi-        Individuals, estates, and trusts can offset passive activ-
cal  expenses  for  your  deceased  spouse  or  dependent,         ity  losses  only  against  passive  activity  income.  Passive 
claim the expenses on your tax return for the year in which        activity losses or credits not allowed in 1 tax year can be 
you paid them, whether they are paid before or after the           carried forward to the next year.
decedent's death. If the decedent was a child of divorced          If  a  passive  activity  interest  is  transferred  because  a 
or  separated  parents,  the  medical  expenses  can  usually      taxpayer  dies,  the  accumulated  unused  passive  activity 
be claimed by both the custodial parent and the noncusto-          losses are allowed as a deduction against the decedent's 
dial  parent  to  the  extent  paid  by  that  parent  during  the income  in  the  year  of  death.  Losses  are  allowed  only  to 
year.                                                              the extent they are greater than the excess of the transfer-
                                                                   ee's (recipient of the interest transferred) basis in the prop-
Insurance reimbursements. Insurance reimbursements 
                                                                   erty over the decedent's adjusted basis in the property im-
of previously deducted medical expenses due a decedent 
                                                                   mediately  before  death.  The  part  of  the  accumulated 
at the time of death and later received by the decedent's 
                                                                   losses equal to the excess isn't allowed as a deduction for 
estate are includible in the income tax return of the estate 
                                                                   any tax year.
(Form  1041)  for  the  year  the  reimbursements  are  re-
                                                                   Use  Form  8582,  Passive  Activity  Loss  Limitations,  to 
ceived. The reimbursements are also includible in the de-
                                                                   summarize losses and income from passive activities and 
cedent's gross estate.
                                                                   to figure the amounts allowed. For more information, see 
        No deduction for funeral expenses can be taken             Pub. 925.
!       on the final Form 1040 or 1040-SR of a decedent. 
CAUTION These expenses may be deductible for estate tax 
                                                                   Credits, Other Taxes, and Payments
purposes on Form 706.
                                                                   Discussed  below  are  some  of  the  tax  credits,  types  of 
                                                                   taxes that may be owed, income tax withheld, and estima-
Deduction for Losses
                                                                   ted  tax  payments  reported  on  the  final  return  of  a  dece-
A  decedent's  NOL  deduction  from  a  prior  year  and  any      dent.
capital  losses  (including  capital  loss  carryovers)  can  be 

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Credits                                                            Other Taxes

On the final income tax return, you can claim any tax cred-        Taxes other than income tax that may be owed on the final 
its  that  applied  to  the  decedent  before  death.  Some  of    return of a decedent include self-employment tax and al-
these credits are discussed next.                                  ternative minimum tax, which are reported on Form 1040 
                                                                   or 1040-SR.
Earned  income  credit. If  the  decedent  was  an  eligible 
individual, you can claim the earned income credit on the          Self-employment  tax. Self-employment  tax  may  be 
decedent's final return even though the return covers less         owed on the final return if either of the following applied to 
than 12 months. If the allowable credit is more than the tax       the decedent in the year of death.
liability for the year, the excess is refunded.
                                                                   1. Net earnings from self-employment (excluding income 
For  more  information,  see  Pub.  596,  Earned  Income 
                                                                   described in (2)) were $400 or more.
Credit (EIC).
                                                                   2. Wages from services performed as a church em-
Credit for the elderly or the disabled.  This credit is al-        ployee were $108.28 or more.
lowable on a decedent's final income tax return if the de-
cedent met both of the following requirements in the year          Alternative minimum tax (AMT).      The tax laws give spe-
of death.                                                          cial treatment to certain types of income and allow special 
•  The decedent was a “qualified individual.”                      deductions and credits for certain types of expenses. The 
                                                                   AMT  was  enacted  so  taxpayers  who  benefit  from  these 
•  The decedent had income (AGI and nontaxable social              laws still pay at least a minimum amount of tax. In general, 
   security and pensions) less than certain limits.                the AMT is the excess of the tentative minimum tax over 
For  details  on  qualifying  for  or  figuring  the  credit,  see the regular tax shown on the return.
Pub. 524, Credit for the Elderly or the Disabled.                  Form  6251. Use  Form  6251,  Alternative  Minimum 
                                                                   Tax—Individuals, to determine if this tax applies to the de-
Child tax credit. If the decedent had a qualifying child, 
                                                                   cedent. See the form instructions for information on when 
you may be able to claim the child tax credit on the dece-
                                                                   you must attach Form 6251 to Form 1040 or 1040-SR.
dent's final return even though the return covers less than 
12 months. You may be able to claim the additional child           Form  8801. If  the  decedent  paid  AMT  in  a  previous 
tax credit and get a refund if the credit is more than the de-     year or had a credit carryforward, the decedent may be el-
cedent's  liability.  For  more  information,  see  the  Instruc-  igible for a minimum tax credit. See Form 8801, Credit for 
tions for Form 1040.                                               Prior Year Minimum Tax—Individuals, Estates, and Trusts.
Adoption  credit. Depending  upon  when  the  adoption 
                                                                   Payments of Tax
was finalized, this credit may be taken on a decedent's fi-
nal income tax return if either of the following applies.          The income tax withheld from the decedent's salary, wa-
•  The decedent adopted an eligible child and paid quali-          ges, pensions, or annuities, and the amount paid as esti-
   fied adoption expenses.                                         mated tax are credits (advance payments of tax) that must 
                                                                   be claimed on the final return.
•  The decedent has a carryforward of an adoption credit 
   from a prior year.
                                                                   Tax Forgiveness for Armed Forces 
Also,  if  the  decedent  is  survived  by  a  spouse  who 
meets the filing status of qualifying surviving spouse, un-        Members, Victims of Terrorism, and 
used adoption credit may be carried forward and used fol-          Astronauts
lowing the death of the decedent. See Form 8839, Quali-
fied  Adoption  Expenses,  and  its  instructions  for  more       Income  tax  liability  may  be  forgiven  for  a  decedent  who 
details.                                                           dies  due  to  service  in  a  combat  zone,  due  to  military  or 
                                                                   terrorist actions, as a result of a terrorist attack, or while 
General  business  tax  credit.   The  general  business           serving in the line of duty as an astronaut.
credit available to a taxpayer is limited. Any unused credit 
arising in a tax year beginning after 1997 has a 1-year car-       Combat Zone
ryback and a 20-year carryforward period.
After  the  carryforward  period,  a  deduction  may  be  al-      If a member of the Armed Forces of the United States dies 
lowed for any unused business credit. If the taxpayer dies         while in active service in a combat zone or from wounds, 
before the end of the carryforward period, the deduction is        disease,  or  injury  incurred  in  a  combat  zone,  the  dece-
generally allowed in the year of death.                            dent's income tax liability is abated (forgiven) for the entire 
For  more  information  on  the  general  business  credit,        year  in  which  death  occurred  and  for  any  prior  tax  year 
see Pub. 334, Tax Guide for Small Business.                        ending on or after the first day the person served in a com-
                                                                   bat  zone  in  active  service.  For  this  purpose,  a  qualified 
                                                                   hazardous duty area is treated as a combat zone.

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If the tax (including interest, additions to the tax, and Determining if a terrorist activity or military action
additional amounts) for these years has been assessed, has occurred. You may rely on published guidance from
the assessment will be forgiven. If the tax has been collec- the IRS to determine if a particular event is considered a
ted (regardless of the date of collection), that tax will be terrorist activity or military action.
credited or refunded.
Specified Terrorist Victim
Any of the decedent's income tax for tax years before
those mentioned above that remains unpaid as of the ac- The Victims of Terrorism Tax Relief Act of 2001 (the Act)
tual (or presumptive) date of death won't be assessed. If provides tax relief for those injured or killed as a result of
any unpaid tax (including interest, additions to the tax, and terrorist attacks, certain survivors of those killed as a re-
additional amounts) has been assessed, this assessment sult of terrorist attacks, and others who were affected by
will be forgiven. Also, if any tax was collected after the terrorist attacks. Under the Act, the federal income tax lia-
date of death, that amount will be credited or refunded. bility of those killed in the following attacks (specified ter-
rorist victim) is forgiven for certain tax years.
The date of death of a member of the Armed Forces re-
ported as missing in action or as a prisoner of war is the • The April 19, 1995, terrorist attack on the Alfred P.
Murrah Federal Building (Oklahoma City).
date the member’s name is removed from missing status
for military pay purposes. This is true even if death actually • The September 11, 2001, terrorist attacks.
occurred earlier. The terrorist attacks involving anthrax occurring after
•
September 10, 2001, and before January 1, 2002.
For other tax information for members of the Armed
Forces, see Pub. 3, Armed Forces' Tax Guide. The Act also exempts from federal income tax the fol-
lowing types of income.
Military or Terrorist Actions
• Qualified disaster relief payments made after Septem-
The decedent's income tax liability is forgiven if, at death, ber 10, 2001, to cover personal, family, living, or fu-
the decedent was a military or civilian employee of the neral expenses incurred because of a terrorist attack.
United States who died because of wounds or injury incur- • Certain disability payments (including Social Security
red: Disability Insurance (SSDI) payments) received in tax
• While a U.S. employee, and years ending after September 10, 2001, for injuries
sustained in a terrorist attack.
• In a military or terrorist action.
• Certain death benefits paid by an employer to the sur-
The forgiveness applies to the tax year in which death vivor of an employee because the employee died as a
occurred and for any earlier tax year, beginning with the result of a terrorist attack.
year before the year in which the wounds or injury occur- • Payments from the September 11th Victim Compen-
red. sation Fund 2001.

Example. The income tax liability of a civilian em- The Act also reduces the estate tax of individuals who
ployee of the United States who died in 2023 because of die as a result of a terrorist attack. See Pub. 3920, Tax
wounds incurred while a U.S. employee in a terrorist at- Relief for Victims of Terrorist Attacks for more information.
tack that occurred in 2017 will be forgiven for 2023 and for
all prior tax years in the period 2016 through 2022. Re- Astronauts
funds are allowed for the tax years for which the period for
filing a claim for refund hasn't ended, as discussed later. Legislation extended the tax relief available under the Vic-
tims of Terrorism Tax Relief Act of 2001 (the Act) to astro-
Military or terrorist action defined. A military or terro- nauts who died in the line of duty after December 31,
rist action means the following. 2002. The decedent's income tax liability is forgiven for
• Any terrorist activity that most of the evidence indi- the tax year in which death occurs, and for the tax year
cates was directed against the United States or any of prior to death. For information on death benefit payments
its allies. and the reduction of federal estate taxes, see Pub. 3920.
However, the discussions in that publication under Death
• Any military action involving the U.S. Armed Forces
Benefits and Estate Tax Reduction should be modified for
and resulting from violence or aggression against the
astronauts (for example, by using the date of death of the
United States or any of its allies, or the threat of such
astronaut instead of September 11, 2001).
violence or aggression.
Terrorist activity includes criminal offenses intended to For more information on the Act, see Pub. 3920.
coerce, intimidate, or retaliate against the government or
civilian population. Military action doesn't include training Claim for Credit or Refund
exercises. Any multinational force in which the United
States is participating is treated as an ally of the United If any of these tax-forgiveness situations applies to a prior
States. year tax, any tax paid for which the period for filing a claim

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hasn't ended will be credited or refunded. If any tax is still        You  must  also  attach  proof  of  death  that  includes  a 
due,  it  will  be  canceled.  The  normal  period  for  filing  a    statement that the individual was a U.S. employee on the 
claim  for  credit  or  refund  is  3  years  after  the  return  was date of injury and on the date of death and died as the re-
filed or 2 years after the tax was paid, whichever is later.          sult of a military or terrorist action. For military and civilian 
                                                                      employees of the Department of Defense, attach DD Form 
If  death  occurred  in  a  combat  zone  or  from  wounds,           1300, Report of Casualty. For other U.S. civilian employ-
disease, or injury incurred in a combat zone, the period for          ees killed in the United States, attach a death certificate 
filing the claim is extended by:                                      and  a  certification  (letter)  from  the  federal  employer.  For 
                                                                      other U.S. civilian employees killed overseas, attach a cer-
1. The amount of time served in the combat zone (in-
                                                                      tification from the Department of State.
   cluding any period in which the individual was in miss-
                                                                      If you don't have enough tax information to file a timely 
   ing status), plus
                                                                      claim  for  refund,  you  can  suspend  the  period  for  filing  a 
2. The period of continuous qualified hospitalization for             claim  by  filing  Form  1040-X.  Attach  Form  1310,  any  re-
   injury from service in the combat zone, if any, plus               quired documentation currently available, and a statement 
                                                                      that you will file an amended claim as soon as you have 
3. The next 180 days.                                                 the required tax information.
Qualified  hospitalization  means  any  hospitalization  out-         Joint returns. If a joint return was filed, only the dece-
side the United States and any hospitalization in the Uni-            dent's part of the income tax liability is eligible for forgive-
ted States of not more than 5 years.                                  ness. Determine the decedent's tax liability as follows.
This extended period for filing the claim also applies to             1. Figure the income tax for which the decedent would 
a member of the Armed Forces who was deployed outside                 have been liable if a separate return had been filed.
the United States in a designated contingency operation.              2. Figure the income tax for which the spouse would 
Filing  a  claim. Use  the  following  procedures  to  file  a        have been liable if a separate return had been filed.
claim.                                                                3. Multiply the joint tax liability by a fraction. The numera-
•  If a U.S. individual income tax return (Form 1040 or               tor of the fraction is the amount in (1) above. The de-
   1040-SR) hasn't been filed, you should make a claim                nominator of the fraction is the total of (1) and (2).
   for refund of any withheld income tax or estimated tax             The resulting amount from (3) above is the decedent's 
   payments by filing Form 1040 or 1040-SR. Form W-2                  tax liability eligible for forgiveness. See also Worksheet B 
   must accompany all returns.                                        in Pub. 3920.
•  If a U.S. individual income tax return has been filed, 
   you should make a claim for refund by filing Form                  Filing Reminders
   1040-X. You must file a separate Form 1040-X for 
   each year in question.                                             To minimize the time needed to process the decedent's fi-
You must file these returns and claims at the following               nal  return  and  issue  any  refund,  be  sure  to  follow  these 
address for regular mail (U.S. Postal Service).                       procedures.
       Internal Revenue Service                                       1. Write “DECEASED,” the decedent's name, and the 
       333 W. Pershing, Stop 6503, P5                                 date of death across the top of the tax return.
       Kansas City, MO 64108                                          2. If a personal representative has been appointed, the 
Identify all returns and claims for refund by writing “Iraqi          personal representative must sign the return. If it is a 
Freedom—KIA,”  “Enduring  Freedom—KIA,”  “Kosovo  Op-                 joint return, the surviving spouse must also sign it.
eration—KIA,”  “Desert  Storm—KIA,”  or  “Former  Yugosla-
                                                                      3. If you are the decedent's spouse filing a joint return 
via—KIA” in bold letters on the top of page 1 of the return 
                                                                      with the decedent and no personal representative has 
or claim. On the applicable return, write the same phrase 
                                                                      been appointed, write “Filing as surviving spouse” in 
on the line for total tax. If the individual was killed in a ter-
                                                                      the area where you sign the return.
rorist or military action, put “KITA” on the front of the return 
and on the line for total tax.                                        4. If no personal representative has been appointed and 
Include an attachment showing the computation of the                  if there is no surviving spouse, the person in charge of 
decedent's tax liability and a computation of the amount to           the decedent's property must file and sign the return 
be forgiven. On joint returns, make an allocation of the tax          as “personal representative.”
as described later under Joint returns. If you can't make a 
                                                                      5. To claim a refund for the decedent, do the following.
proper allocation, attach a statement of all income and de-
ductions allocable to each spouse and the IRS will make               a. If you are the decedent's spouse filing a joint re-
the proper allocation.                                                turn with the decedent, file only the tax return to 
You must attach Form 1310 to all returns and claims for               claim the refund.
refund.  However,  for  exceptions  to  filing  Form  1310,  see 
                                                                      b. If you are the personal representative and the re-
Form 1310, Statement of Person Claiming Refund Due a 
                                                                      turn isn't a joint return filed with the decedent's 
Deceased Taxpayer, under Refund, earlier.
                                                                      surviving spouse, file the return and attach a copy 

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        of the certificate that shows your appointment by           child for the entire year except for temporary absen-
        the court. (A power of attorney or a copy of the de-        ces.
        cedent's will isn't acceptable evidence of your ap-
        pointment as the personal representative.) If you         Example.     Skyler’s  spouse,  Cameron,  died  in  2021. 
        are filing an amended return, attach Form 1310            Skyler  hasn't  remarried  and  continued  throughout  2022 
        and a copy of the certificate of appointment (or, if      and 2023 to maintain a home for self and dependent child. 
        you have already sent the certificate of appoint-         For 2021, Skyler was entitled to file a joint return with Ca-
        ment to the IRS, write “Certificate Previously Filed”     meron.  For  2022  and  2023,  Skyler  qualifies  to  file  as  a 
        at the bottom of Form 1310).                              qualifying surviving spouse with dependent child. For later 
                                                                  years, Skyler may qualify to file as head of household.
  c. If you aren't filing a joint return as the surviving 
        spouse and a personal representative hasn't been          Figuring  your  tax.      Check  the  qualifying  surviving 
        appointed, file the return and attach Form 1310.          spouse box on the top of your Form 1040 or 1040-SR tax 
                                                                  return.  In  the  Instructions  for  Form  1040  (and  1040-SR), 
                                                                  use the married filing jointly column in the Tax Table.
                                                                  The  last  year  you  can  file  jointly  with  your  deceased 
Other Tax Information                                             spouse is the year of death.

Discussed below is information about the effect of an indi-       Joint return filing rules. If you are the surviving spouse 
vidual's death on the income tax liability of the survivors       and  a  personal  representative  is  handling  the  estate  for 
(including the surviving spouse), the beneficiaries, and the      the decedent, you should coordinate filing your return for 
estate.                                                           the  year  of  death  with  this  personal  representative.  See 
                                                                  Joint  Return  under Final  Income  Tax  Return  for  Dece-
Tax Benefits for Survivors                                        dent—Form 1040 or 1040-SR, earlier.

Survivors can qualify for certain benefits when filing their      Income in Respect of a Decedent
own income tax returns.
Joint return by surviving spouse.    A surviving spouse           All income the decedent would have received had death 
can file a joint return for the year of death and may qualify     not occurred that wasn't properly includible on the final re-
for special tax rates for the following 2 years, as explained     turn, discussed earlier, is income in respect of a decedent.
under Qualifying surviving spouse, later.                                  If the decedent is a specified terrorist victim (see 
                                                                           Specified  Terrorist  Victim,  earlier),  income  re-
Decedent as your dependent.  If the decedent qualified            CAUTION! ceived after the date of death and before the end 
as your dependent for a part of the year before death, you        of the decedent's tax year (determined without regard to 
can claim the dependent on your tax return, regardless of         death) is excluded from the recipient's gross income. This 
when death occurred during the year.                              exclusion doesn't apply to certain income. For more infor-
If the decedent was your qualifying child, you may be             mation, see Pub. 3920.
able  to  claim  the  child  tax  credit  or  the  earned  income 
credit. To determine if you qualify for the child tax credit, 
see the Instructions for Form 1040 (and 1040-SR), line 19;        How To Report
or Form 1040-NR, line 19. To determine if you qualify for 
the  earned  income  credit,  see  the  instructions  for  Form   Income in respect of a decedent must be included in the 
1040 and 1040-SR, line 27.                                        income of one of the following.
Qualifying surviving spouse. If your spouse died within           • The decedent's estate, if the estate receives it.
the 2 tax years preceding the year for which your return is       • The beneficiary, if the right to income is passed di-
being filed, you may be eligible to claim the filing status of      rectly to the beneficiary and the beneficiary receives it.
qualifying  surviving  spouse  with  dependent  child  and 
qualify to use the married-filing-jointly tax rates.              • Any person to whom the estate properly distributes 
                                                                    the right to receive it.
Requirements. Generally,  you  qualify  for  this  special                 If you have to include income in respect of a dece-
benefit if you meet all of the following requirements.            TIP      dent in your gross income and an estate tax return 
• You were entitled to file a joint return with your spouse                (Form 706) was filed for the decedent, you may be 
  for the year of death—whether or not you actually filed         able to claim a deduction for the estate tax paid on that in-
  jointly.                                                        come. See Estate Tax Deduction, later.
• You didn't remarry before the end of the current tax 
  year.                                                           Example 1.   F. Johnson owned and operated an apple 
                                                                  orchard and used the cash method of accounting. F. John-
• You have a child, stepchild, or foster child who quali-         son sold and delivered 1,000 bushels of apples to a can-
  fies as your dependent for the tax year.                        ning factory for $2,000, but didn't receive payment before 
• You provide more than half the cost of maintaining              death. The proceeds from the sale are income in respect 
  your home, which is the principal residence of that             of a decedent. When the estate was settled, payment had 

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not been made and the estate transferred the right to the If you make a gift of such a right, you must include in
payment to F. Johnson’s surviving spouse. When the sur- your income the FMV of the right at the time of the gift.
viving spouse collects the $2,000, that amount must be in- If the right to income from an installment obligation is
cluded in the surviving spouse’s return. It isn't reported on transferred, the amount you must include in income is re-
the final return of the decedent or on the return of the es- duced by the basis of the obligation. See Installment obli-
tate. gations, later.
Example 2. Assume the same facts as in Example 1, Transfer defined. A transfer for this purpose includes
except that F. Johnson used the accrual method of ac- a sale, exchange, or other disposition, the satisfaction of
counting. The amount accrued from the sale of the apples an installment obligation at other than face value, or the
would be included on F. Johnson’s final return. Neither the cancellation of an installment obligation.
estate nor the surviving spouse would realize income in
Installment obligations. If the decedent sold property
respect of a decedent when the money is later paid.
using the installment method and you are collecting pay-
Example 3. On February 1, G. High, a cash method ments on an installment obligation acquired from the de-
taxpayer, sold a tractor for $3,000, payable March 1 of the cedent, use the same gross profit percentage the dece-
same year. G. High’s adjusted basis in the tractor was dent used to figure the part of each payment that
$2,000. G. High died on February 15, before receiving represents profit. Include in your income the same profit
payment. The gain to be reported as income in respect of the decedent would have included had death not occur-
a decedent is the $1,000 difference between the dece- red. For more information, see Pub. 537, Installment
dent's basis in the property and the sale proceeds. In Sales.
other words, the income in respect of a decedent is the If you dispose of an installment obligation acquired
gain the decedent would have realized had the decedent from a decedent (other than by transfer to the obligor), the
lived. rules explained in Pub. 537 for figuring gain or loss on the
disposition apply to you.
Example 4. C. O'Neil was entitled to a large salary
Transfer to obligor. A transfer of a right to income,
payment at the date of death. The amount was to be paid
discussed earlier, has occurred if the decedent (seller)
in five annual installments. The estate, after collecting two
sold property using the installment method and the install-
installments, distributed the right to the remaining install-
ment obligation was transferred to the obligor (buyer or
ments to you, the beneficiary. The payments are income in
person legally obligated to pay the installments). A trans-
respect of a decedent. None of the payments were includ-
fer also occurs if the obligation was canceled either at
ible on C. O’Neil's final return. The estate must include in
death or by the estate or person receiving the obligation
its income the two installments it received, and you must
from the decedent. An obligation that becomes unenforce-
include in your income each of the three installments as
able is treated as having been canceled.
you receive them.
If such a transfer occurs, the amount included in the in-
Example 5. Danny inherited the right to receive re- come of the transferor (the estate or beneficiary) is the
newal commissions on life insurance sold by Danny’s pa- greater of the amount received or the FMV of the install-
rent, Taylor, before Taylor’s death. Danny inherited the ment obligation at the time of transfer, reduced by the ba-
right from Danny’s other parent, Charlie, who acquired it sis of the obligation. The basis of the obligation is the de-
by bequest from Taylor. Charlie died before receiving all cedent's basis, adjusted for all installment payments
the commissions Charlie had the right to receive, so received after the decedent's death and before the trans-
Danny received the rest. The commissions are income in fer.
respect of a decedent. None of these commissions were If the decedent and obligor were related persons, the
includible in Taylor’s final return. The commissions re- FMV of the obligation can't be less than its face value.
ceived by Charlie were included in Charlie’s income. The
commissions Danny received aren't includible in Charlie’s Specific Types of Income in Respect of a
income, even on Charlie’s final return. Danny must include Decedent
them in Danny’s income.
This section explains and provides examples of some
Character of income. The character of the income you specific types of income in respect of a decedent.
receive in respect of a decedent remains the same as it
would have been to the decedent if the decedent were Wages. The entire amount of wages or other employee
alive. If the income would have been a capital gain to the compensation earned by the decedent but unpaid at the
decedent, it will be a capital gain to you. time of death is income in respect of a decedent. The in-
come isn't reduced by any amounts withheld by the em-
Transfer of right to income. If you transfer your right to ployer. If the income is $600 or more, the employer should
income in respect of a decedent, you must include in your report it in box 3 of Form 1099-MISC, Miscellaneous In-
income the greater of: come, and give the recipient a copy of the form or a similar
statement.
• The amount you receive for the right, or
Wages paid as income in respect of a decedent aren't
• The FMV of the right you transfer. subject to federal income tax withholding. However, if paid

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during the calendar year of death, they are subject to with- death, the increase in value of the bonds (interest earned)
holding for social security and Medicare taxes. These in the year of death up to the date of death must be repor-
taxes should be included on the decedent's Form W-2 ted on the decedent's final return. The transferee (estate
along with the taxes withheld before death. These wages or beneficiary) reports on its return only the interest
aren't included in box 1 of Form W-2. earned after the date of death.
Wages paid as income in respect of a decedent after The redemption values of U.S. savings bonds are gen-
the year of death aren’t generally subject to withholding for erally available from local banks, credit unions, savings
any federal taxes. and loan institutions, or your nearest Federal Reserve
Bank.
Farm income from crops, crop shares, and livestock. You can also get information by writing to the following
A farmer's growing crops and livestock at the date of address.
death wouldn’t normally give rise to income in respect of a
decedent or income to be included in the final return. Series EE and Series I
However, when a cash method farmer receives rent in the Treasury Retail Securities Services
form of crop shares or livestock and owns the crop shares P.O. Box 9150
or livestock at the time of death, the rent is income in re- Minneapolis, MN 55480-9150
spect of a decedent and is reported in the year in which
Or go to TreasuryDirect.gov.
the crop shares or livestock are sold or otherwise dis-
posed of. The same treatment applies to crop shares or
livestock that the decedent had a right to receive as rent at
the time of death for economic activities that occurred be- If the bonds transferred because of death were owned
fore death. by a cash method taxpayer who chose not to report the in-
If the individual died during a rental period, only the net terest each year and had purchased the bonds entirely
proceeds from the part of the rental period ending on the with personal funds, interest earned before death must be
date of death are income in respect of a decedent. The reported in one of the following ways.
proceeds from the rental period from the day after death to 1. The person (executor, administrator, etc.) who is re-
the end of the rental period are ordinary income to the es- quired to file the decedent's final income tax return
tate. Cash rent or crop shares and livestock received as can elect to include all of the interest earned on the
rent and reduced to cash by the decedent are includible bonds before the decedent's death on the return. The
on the final return even though the rental period didn't end transferee (estate or beneficiary) then includes only
until after death. the interest earned after the date of death on its re-
turn.
Example. A. Roberts, who used the cash method of
accounting, leased part of the farm for a 1-year period be- 2. If the election in (1) above wasn't made, the interest
ginning March 1. The rental was one-third of the crop, pay- earned to the date of death is income in respect of the
able in cash when the crop share is sold at the direction of decedent and isn't included on the decedent's final re-
A. Roberts. A. Roberts died on June 30 and was alive dur- turn. In this case, all of the interest earned before and
ing 122 days of the rental period. Seven months later, A. after the decedent's death is income to the transferee
Roberts' personal representative ordered the crop to be (estate or beneficiary). A transferee who uses the
sold and was paid $1,500. Of the $1,500, 122/365, or cash method of accounting and who has chosen not
$501, is income in respect of a decedent. The balance of to report the interest annually may defer reporting any
the $1,500 received by the estate, $999, is income to the of it as income until the bonds are either cashed or
estate. reach the date of maturity, whichever is earlier. In the
year the interest is reported, the transferee may claim
Partnership income. If the decedent had been receiving a deduction for any federal estate tax paid that arose
payments representing a distributive share or guaranteed because of the part of interest (if any) included in the
payment in liquidation of the decedent’s interest in a part- decedent's estate.
nership, the remaining payments made to the estate or
other successor in interest are income in respect of a de- Example 1. Your relative, Drew, a cash method tax-
cedent. The estate or the successor receiving the pay- payer, died and left you a $1,000 series EE bond. Drew
ments must include them in income when received. Simi- bought the bond for $500 and had not chosen to report
larly, the estate or other successor in interest receives the increase in value each year. At the date of death, inter-
income in respect of a decedent if amounts are paid by a est of $94 had accrued on the bond, and its value of $594
third person in exchange for the successor's right to the at date of death was included in Drew's estate. Drew's
future payments. personal representative didn't choose to include the $94
For a discussion of partnership rules, see Pub. 541, accrued interest on the decedent's final income tax return.
Partnerships. You are a cash method taxpayer and don't choose to re-
port the increase in value each year as it is earned. As-
U.S. savings bonds acquired from decedent. If series suming you cash it when it reaches maturity value of
EE or series I U.S. savings bonds, owned by a cash $1,000, you would report $500 interest income (the differ-
method taxpayer who reported the interest each year, or ence between maturity value of $1,000 and the original
by an accrual method taxpayer, are transferred because of cost of $500) in that year. You are also entitled to claim, in

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that year, a deduction for any federal estate tax resulting ual's death is income in respect of a decedent. This inter-
from the inclusion in Drew’s estate of the $94 increase in est isn't included in the decedent's final income tax return.
value. The estate will treat such interest as taxable income in the
tax year received if it chooses to redeem the U.S. Treasury
Example 2. If, in Example 1, the personal representa- bonds to pay federal estate taxes. If the person entitled to
tive had chosen to include the $94 interest earned on the the bonds (by bequest, devise, or inheritance, or because
bond before death in the final income tax return for Drew, of the death of the individual) receives them, that person
you would report $406 ($500 − $94) as interest when you will treat the accrued interest as taxable income in the
cashed the bond at maturity. This $406 represents the in- year the interest is received. Interest that accrues on the
terest earned after Drew's death and wasn't included in U.S. Treasury bonds after the owner's death doesn't repre-
Drew’s estate, so no deduction for federal estate tax is al- sent income in respect of a decedent. The interest, how-
lowable for this amount. ever, is taxable income and must be included in the in-
come of the respective recipients.
Example 3. Drew died owning series HH bonds Drew
acquired in exchange for series EE bonds. You were the Interest accrued on savings certificates. The interest
beneficiary of these bonds. Drew used the cash method of accrued on savings certificates (redeemable after death
accounting and had not chosen to report the increase in without forfeiture of interest) for the period from the date of
redemption price of the series EE bonds each year as it the last interest payment and ending with the date of the
accrued. Drew's personal representative made no election decedent's death, but not received as of that date, is in-
to include any interest earned before death on the dece- come in respect of a decedent. Interest accrued after the
dent's final return. Your income in respect of the decedent decedent's death that becomes payable on the certifi-
is the sum of the unreported increase in value of the series cates after death isn't income in respect of a decedent,
EE bonds, which constituted part of the amount paid for but is taxable income includible in the income of the re-
the series HH bonds, and the interest, if any, payable on spective recipients.
the series HH bonds but not received as of the date of the
decedent's death. Inherited individual retirement arrangements (IRAs).
If a beneficiary receives a lump-sum distribution from a
Specific dollar amount legacy satisfied by transfer
traditional IRA the beneficiary inherited, all or some of it
of bonds. If a beneficiary receives series EE or series I
may be taxable. The distribution is taxable in the year re-
bonds from an estate in satisfaction of a specific dollar
ceived as income in respect of a decedent up to the dece-
amount legacy and the decedent was a cash method tax-
dent's taxable balance. This is the decedent's balance at
payer who didn't elect to report interest each year, only the
the time of death, including unrealized appreciation and
interest earned after receipt of the bonds is income to the
income accrued to date of death, minus any basis (nonde-
beneficiary. The interest earned to the date of death plus
ductible contributions). Amounts distributed that are more
any further interest earned to the date of distribution is in-
than the decedent's entire IRA balance (includes taxable
come to (and reportable by) the estate.
and nontaxable amounts) at the time of death are the in-
Cashing U.S. savings bonds. When you cash a U.S. come of the beneficiary.
savings bond that you acquired from a decedent, the bank If the beneficiary of a traditional IRA is the decedent's
or other payer that redeems it must give you a Form surviving spouse who properly rolls over the distribution
1099-INT if the interest part of the payment you receive is into another traditional IRA, the distribution isn't currently
$10 or more. Your Form 1099-INT should show the differ- taxed. A surviving spouse can also roll over tax free the
ence between the amount received and the cost of the taxable part of the distribution into a qualified plan, section
bond. The interest shown on your Form 1099-INT won't be 403 annuity, or section 457 plan.
reduced by any interest reported by the decedent before For more information on inherited IRAs, see Pub.
death, or, if elected, by the personal representative on the 590-B, Distributions from Individual Retirement Arrange-
final income tax return of the decedent, or by the estate on ments (IRAs).
the estate's income tax return. Your Form 1099-INT may
show more interest than you must include in your income. Roth IRAs. Qualified distributions from a Roth IRA aren't
You must make an adjustment on your tax return to re- subject to tax. A distribution made to a beneficiary or to
port the correct amount of interest. Report the total inter- the Roth IRA owner's estate on or after the date of death
est shown on Form 1099-INT on your Schedule B (Form is a qualified distribution if it is made after the 5-tax-year
1040). Enter a subtotal of the interest shown on Forms period beginning with the first tax year in which a contribu-
1099, and the interest reportable from other sources for tion was made to any Roth IRA of the owner.
which you didn't receive Forms 1099. Show the total inter- Generally, the entire interest in the Roth IRA must be
est that was previously reported and subtract it from the distributed by the end of the fifth calendar year after the
subtotal. Identify this adjustment as “U.S. Savings Bond year of the owner's death unless the interest is payable to
Interest Previously Reported.” a designated beneficiary over the beneficiary’s life or life
expectancy. If paid as an annuity, the distributions must
Interest accrued on U.S. Treasury bonds. The interest begin before the end of the calendar year following the
accrued on U.S. Treasury bonds owned by a cash method year of death. If the sole beneficiary is the decedent's
taxpayer and redeemable for the payment of federal es- spouse, the spouse can delay the distributions until the
tate taxes that wasn't received as of the date of the individ-

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decedent would have reached the applicable age or can medical expenses for the decedent paid by the beneficiary
treat the Roth IRA as the spouse’s own Roth IRA. within 1 year after the decedent's date of death. An estate
The part of any distribution made to a beneficiary that tax deduction, discussed later, applies to the amount in-
isn't a qualified distribution may be includible in the benefi- cluded in income by a beneficiary other than the dece-
ciary's income. Generally, the part includible is the earn- dent's spouse.
ings in the Roth IRA. Earnings attributable to the period
ending with the decedent's date of death are income in re- Deductions in Respect of a Decedent
spect of a decedent. Additional earnings are the income of
the beneficiary. Items such as business expenses, income-producing ex-
For more information on Roth IRAs, see Pub. 590-A, penses, interest, and taxes, for which the decedent was li-
Contributions to Individual Retirement Arrangements able but that aren't properly allowable as deductions on
(IRAs), and Pub. 590-B. the decedent's final income tax return will be allowed as a
Coverdell ESA. Generally, the balance in a Coverdell deduction to one of the following when paid.
ESA must be distributed within 30 days after the individual • The estate.
for whom the account was established reaches age 30 or
• The person who acquired an interest in the decedent's
dies, whichever is earlier. The treatment of the Coverdell
property (subject to such obligations) because of the
ESA at the death of an individual under age 30 depends
decedent's death, if the estate wasn't liable for the ob-
on who acquires the interest in the account. If the dece-
ligation.
dent's estate acquires the interest, see the discussion un-
der Final Income Tax Return for Decedent—Form 1040 or Note. Similar treatment is given to the foreign tax
1040-SR, earlier. credit. A beneficiary who must pay a foreign tax on income
The age 30 limitation doesn't apply if the individ- in respect of a decedent will be entitled to claim the for-
eign tax credit.
! ual for whom the account was established or the
CAUTION beneficiary that acquires the account is an individ-
ual with special needs. This includes an individual who, Depletion. The deduction for percentage depletion is al-
because of a physical, mental, or emotional condition (in- lowable only to the person (estate or beneficiary) who re-
cluding a learning disability), requires additional time to ceives income in respect of a decedent to which the de-
complete the individual’s education. duction relates, whether or not that person receives the
property from which the income is derived. An heir who
If the decedent's spouse or other family member is the (because of the decedent's death) receives income as a
designated beneficiary of the decedent's account, the result of the sale of units of mineral by the decedent (who
Coverdell ESA becomes that person's Coverdell ESA. It is used the cash method) will be entitled to the depletion al-
subject to the rules discussed in Pub. 970. lowance for that income. If the decedent had not figured
Any other beneficiary (including a spouse or family the deduction on the basis of percentage depletion, any
member who isn't the designated beneficiary) must in- depletion deduction to which the decedent was entitled at
clude in income the earnings portion of the distribution. the time of death is allowable on the decedent's final re-
Any balance remaining at the close of the 30-day period is turn, and no depletion deduction in respect of a decedent
deemed to be distributed at that time. The amount inclu- is allowed to anyone else.
ded in income is reduced by any qualified education ex- For more information about depletion, see chapter 9 in
penses of the decedent that are paid by the beneficiary Pub. 535, Business Expenses.
within 1 year after the decedent's date of death. An estate
tax deduction, discussed later, applies to the amount in-
Estate Tax Deduction
cluded in income by a beneficiary other than the dece-
dent's spouse or family member.
Income that the decedent had a right to receive is inclu-
HSA, Archer MSA, or Medicare Advantage MSA. The ded in the decedent's gross estate and is subject to estate
treatment of an HSA, an Archer MSA, or a Medicare Ad- tax. This income in respect of a decedent is also taxed
vantage MSA at the death of the account holder depends when received by the recipient (estate or beneficiary).
on who acquires the interest in the account. If the dece- However, an income tax deduction is allowed to the recipi-
dent's estate acquired the interest, see the discussion un- ent for the estate tax paid on the income.
der Final Income Tax Return for Decedent—Form 1040 or
The deduction for estate tax paid can only be claimed
1040-SR, earlier.
for the same tax year in which the income in respect of a
If the decedent's spouse is the designated beneficiary
decedent must be included in the recipient's income. (This
of the account, the account becomes that spouse's Archer
is also true for income in respect of a prior decedent.)
MSA. It is subject to the rules discussed in Pub. 969.
Any other beneficiary (including a spouse that isn't the Individuals can claim this deduction only as an itemized
designated beneficiary) must include in income the FMV deduction on line 16 of Schedule A (Form 1040). Estates
of the assets in the account on the decedent's date of can claim the deduction on line 19 of Form 1041.
death. This amount must be reported for the beneficiary's
tax year that includes the decedent's date of death. The If income in respect of a decedent is capital gain in-
amount included in income is reduced by any qualified come, you must reduce the gain, but not below zero, by

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any deduction for estate tax paid on such gain. This ap- $12,000
plies in figuring the following. $20,000 X $4,620 = $2,772
• The maximum tax on net capital gain (including quali-
fied dividends). If the amount you collected for the accounts receivable
was more than $12,000, you would still claim $2,772 as an
• The exclusion for gain on small business stock under estate tax deduction because only the $12,000 actually
section 1202. reported on the estate tax return can be used in the above
• The limitation on capital losses. computation. However, if you collected less than the
$12,000 reported on the estate tax return, use the smaller
Computation amount to figure the estate tax deduction.

To figure a recipient's estate tax deduction, determine: Estates. The estate tax deduction allowed to an estate is
figured in the same manner discussed earlier. However,
• The estate tax that qualifies for the deduction, and any income in respect of a decedent received by the es-
• The recipient's part of the deductible tax. tate during the tax year is reduced by any such income
properly paid, credited, or required to be distributed by the
Deductible estate tax. The estate tax is the tax on the estate to a beneficiary. The beneficiary would include
taxable estate, reduced by any credits allowed. The estate such distributed income in respect of a decedent for figur-
tax qualifying for the deduction is the part of the net value ing the beneficiary's estate tax deduction.
of all the items in the estate that represent income in re-
spect of a decedent. Net value is the excess of the items Surviving annuitants. For the estate tax deduction, an
of income in respect of a decedent over the items of ex- annuity received by a surviving annuitant under a joint and
penses in respect of a decedent. The deductible estate survivor annuity contract is considered income in respect
tax is the difference between the actual estate tax and the of a decedent. The deceased annuitant must have died af-
estate tax determined without including net value. ter the annuity starting date. You must make a special
computation to figure the estate tax deduction for the sur-
Example 1. J. Sage used the cash method of account- viving annuitant. See Regulations section 1.691(d)-1.
ing. At the time of death, J. Sage was entitled to receive
$12,000 from clients for services provided and had ac- Gifts, Insurance, and Inheritances
crued bond interest of $8,000, for total income in respect
of a decedent of $20,000. J. Sage also owed $5,000 for Property received as a gift, bequest, or inheritance isn't in-
business expenses for which the estate is liable. The in- cluded in your income. However, if property you receive in
come and expenses are reported on J. Sage's estate tax this manner later produces income, such as interest, divi-
return. dends, or rents, that income is taxable to you. The income
The tax on J. Sage's estate is $9,460, after credits. The from property donated to a trust that is paid, credited, or
net value of the items included as income in respect of the distributed to you is taxable income to you. If the gift, be-
decedent is $15,000 ($20,000 − $5,000). The estate tax quest, or inheritance is the income from property, that in-
determined without including the $15,000 in the taxable come is taxable to you.
estate is $4,840, after credits. The estate tax that qualifies
for the deduction is $4,620 ($9,460 − $4,840). If you receive property from a decedent's estate in sat-
isfaction of your right to the income of the estate, it is trea-
Recipient's deductible part. Figure the recipient's part ted as a bequest or inheritance of income from property.
of the deductible estate tax by dividing the estate tax See Distributions to Beneficiaries, later.
value of the items of income in respect of a decedent in-
cluded in the recipient's income (the numerator) by the to-
Insurance
tal value of all items included in the estate that represent
income in respect of a decedent (the denominator). If the
The proceeds from a decedent's life insurance policy paid
amount included in the recipient's income is less than the
by reason of the decedent’s death are generally excluded
estate tax value of the item, use the lesser amount in the
from income. The exclusion applies to any beneficiary,
numerator.
whether a family member or other individual, a corpora-
Example 2. As the beneficiary of J. Sage's estate (Ex- tion, or a partnership.
ample 1), you collect the $12,000 accounts receivable
Veterans' insurance proceeds. Veterans' insurance
from J. Sage’s clients. You will include the $12,000 in your
proceeds and dividends aren't taxable either to the vet-
income in the tax year you receive it. If you itemize your
eran or to the beneficiaries.
deductions in that tax year, you can claim an estate tax
Interest on dividends left on deposit with the Depart-
deduction of $2,772 figured as follows:
ment of Veterans Affairs isn't taxable.
Value included in your income
Estate tax qualifying for
Total value of income in respect X Life insurance proceeds. Life insurance proceeds paid
of decedent deduction to a beneficiary because of the death of the insured (or
because the insured is a member of the U.S. uniformed
services who is missing in action) aren't taxable unless the

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policy was turned over to the recipient for a price. This is the insurance company by the number of installments to
true even if the proceeds are paid under an accident or which the beneficiary is entitled. In case the beneficiary
health insurance policy or an endowment contract. If the dies before receiving all the installments, a secondary
proceeds are received in installments, see the discussion beneficiary is entitled to the same exclusion.
under Insurance received in installments, later.
Example. As beneficiary, you choose to receive
Accelerated death benefits. A beneficiary can exclude $100,000 of life insurance proceeds in 10 annual install-
from income accelerated death benefits received on the ments of $11,000. Each year, you can exclude from your
life of an insured individual if certain requirements are met. income $10,000 ($100,000 ÷ 10) as a return of principal.
Accelerated death benefits are amounts received under a The balance of the installment, $1,000, is taxable as inter-
life insurance contract before the death of the insured. est income.
These benefits also include amounts received on the sale
Specified amount payable. If each installment re-
or assignment of the contract to a viatical settlement pro-
ceived under the insurance contract is a specific amount
vider. This exclusion applies only if the insured was a ter-
based on a guaranteed rate of interest, but the number of
minally ill individual or a chronically ill individual. This ex-
installments that will be received is uncertain, the part of
clusion doesn't apply if the insured is a director, officer, or
each installment excluded from income is the amount held
employee, or has a financial interest in any trade or busi-
by the insurance company divided by the number of in-
ness carried on by the beneficiary.
stallments necessary to use up the principal and guaran-
Terminally ill individual. A terminally ill individual is teed interest in the contract.
one who has been certified by a physician as having an ill-
ness or physical condition that can reasonably be expec- Example. The face amount of the policy is $200,000,
ted to result in death in 24 months or less from the date of and as beneficiary you choose to receive annual install-
certification. ments of $12,000. The insurer's settlement option guaran-
tees you this amount for 20 years based on a guaranteed
Chronically ill individual. A chronically ill individual is rate of interest. It also provides that extra interest may be
one who has been certified as one of the following. credited to the principal balance according to the insurer's
• An individual who, for at least 90 days, is unable to earnings. The excludable part of each guaranteed install-
perform at least two activities of daily living without ment is $10,000 ($200,000 ÷ 20 years). The balance of
substantial assistance due to a loss of functional ca- each guaranteed installment, $2,000, is interest income to
pacity. you. The full amount of any additional payment for interest
is income to you.
• An individual who requires substantial supervision to
be protected from threats to health and safety due to Installments for life. If the beneficiary under an insur-
severe cognitive impairment. ance contract is entitled to receive the proceeds in install-
A certification must have been made by a licensed ments for the rest of the beneficiary’s life without a refund
health care practitioner within the previous 12 months. or period-certain guarantee, the excluded part of each in-
stallment can be determined by dividing the amount held
Exclusion limited. If the insured was a chronically ill by the insurance company by the beneficiary’s life expect-
individual, exclusion of accelerated death benefits is limi- ancy. If there is a refund or period-certain guarantee, the
ted to the cost incurred in providing qualified long-term amount held by the insurance company for this purpose is
care services for the insured. In determining the cost in- reduced by the actuarial value of the guarantee.
curred, don't include amounts paid or reimbursed by insur-
ance or otherwise. Subject to certain limits, exclude pay- Example. As beneficiary, you choose to receive the
ments received on a periodic basis without regard to $50,000 proceeds from a life insurance contract under a
costs. life-income-with-cash-refund option. You are guaranteed
$2,700 a year for the rest of your life (which is estimated
Interest option on insurance. If an insurance company by use of mortality tables to be 25 years from the insured's
pays interest only on proceeds from life insurance left on death). The actuarial value of the refund feature is $9,000.
deposit, the interest is taxable. The amount held by the insurance company, reduced by
the value of the guarantee, is $41,000 ($50,000 − $9,000)
Insurance received in installments. If a beneficiary re- and the excludable part of each installment representing a
ceives life insurance proceeds in installments, the benefi- return of principal is $1,640 ($41,000 ÷ 25). The remaining
ciary can exclude part of each installment from income. $1,060 ($2,700 − $1,640) is interest income to you. If you
To determine the part excluded, divide the amount held should die before receiving the entire $50,000, the refund
by the insurance company (generally the total lump sum payable to the refund beneficiary isn't taxable.
payable at the death of the insured person) by the number
of installments to be paid. Include anything over this exclu- Flexible premium contracts. A life insurance contract
ded part in income as interest. (including any qualified additional benefits) qualifies as a
Specified number of installments. If a beneficiary flexible premium life insurance contract if it provides for
will receive a specified number of installments under the the payment of one or more premiums that aren't fixed by
insurance contract, figure the part of each installment the the insurer as to both timing and amount. For a flexible
beneficiary can exclude by dividing the amount held by premium contract issued before January 1, 1985, the

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proceeds paid under the contract because of the death of If you must pay any additional estate (recapture) tax,
the insured will be excluded from the recipient's income you can elect to increase your basis in the special-use val-
only if the contract meets the requirements explained un- uation property to its FMV on the date of the decedent's
der section 101(f). death (or on the alternate valuation date, if it was elected
by the personal representative). If you elect to increase
Basis of Inherited Property your basis, you must pay interest on the recapture tax for
the period beginning 9 months after the decedent's death
The basis of property inherited from a decedent is gener- until the date you pay the recapture tax.
ally one of the following. For more information on the recapture tax, see the In-
• The FMV of the property on the date of the individual's structions for Form 706-A, United States Additional Estate
death. Tax Return.

• The FMV on the alternate valuation date (discussed in S corporation stock. The basis of inherited S corpora-
the Instructions for Form 706) if elected by the per- tion stock must be reduced if there is income in respect of
sonal representative. a decedent attributable to that stock.

• The value under the special-use valuation method for Joint interest. Figure the surviving tenant's new basis of
real property used in farming or other closely held jointly owned property (joint tenancy or tenancy by the en-
business (see Special-use valuation, later), if elected tirety) by adding the surviving tenant's original basis in the
by the personal representative. property to the value of the part of the property included in
• The decedent's adjusted basis in land to the extent of the decedent's estate, discussed earlier. Subtract from the
the value excluded from the decedent's taxable estate sum any deductions for wear and tear, such as deprecia-
as a qualified conservation easement (discussed in tion or depletion, allowed to the surviving tenant on that
the Instructions for Form 706). property.

Exception for appreciated property. If you or your Example. F. Maple and sibling A. Maple owned, as
spouse gave appreciated property to an individual during joint tenants with right of survivorship, rental property they
the 1-year period ending on the date of that individual's purchased for $60,000. A. Maple paid $15,000 of the pur-
death and you (or your spouse) later acquired the same chase price and F. Maple paid $45,000. Under local law,
property from the decedent, your basis in the property is each had a half interest in the income from the property.
the same as the decedent's adjusted basis immediately When F. Maple died, the FMV of the property was
before death. $100,000. Depreciation deductions allowed before F. Ma-
ple's death were $20,000. A. Maple's basis in the property
Appreciated property. Appreciated property is prop- is $80,000 figured as follows:
erty that had an FMV greater than its adjusted basis on
the day it was transferred to the decedent. A. Maple's original basis. . . . . . . . . . . . $15,000
Interest acquired from F. Maple
Special-use valuation. If you are a qualified heir and you ( / of $100,000)3 4 . . . . . . . . . . . . . . . . . 75,000 $90,000
receive a farm or other closely held business real property Minus: / of $20,000 depreciation1 2 . . . . . . . . . . . . . . 10,000
from the estate for which the personal representative elec- A. Maple's basis. . . . . . . . . . . . . . . . . . . . . . . . $80,000
ted special-use valuation, the property is valued on the
basis of its actual use rather than its FMV. Qualified joint interest. One-half of the value of prop-
If you are a qualified heir and you buy special-use valu- erty owned by a decedent and spouse as tenants by the
ation property from the estate, your basis is equal to the entirety, or as joint tenants with right of survivorship if the
estate's basis (determined under the special-use valuation decedent and spouse are the only joint tenants, is inclu-
method) immediately before your purchase plus any gain ded in the decedent's gross estate. This is true regardless
recognized by the estate. of how much each contributed toward the purchase price.
You are a qualified heir if you are an ancestor (parent, Figure the basis for a surviving spouse by adding
grandparent, etc.), the spouse, or a lineal descendant one-half of the property's cost basis to the value included
(child, grandchild, etc.) of the decedent, a lineal descend- in the gross estate. Subtract from this sum any deductions
ant of the decedent's parent or spouse, or the spouse of for wear and tear, such as depreciation or depletion, al-
any of these lineal descendants. lowed on that property to the surviving spouse.
For more information on special-use valuation, see the
Instructions for Form 706. Example. D. Gilbert and J. Gilbert owned, as tenants
Increased basis for special-use valuation property. by the entirety, rental property they purchased for $60,000.
Under certain conditions, some or all of the estate tax D. Gilbert paid $15,000 of the purchase price and J. Gil-
benefits obtained by using the special-use valuation will bert paid $45,000. Under local law, each had a half inter-
be subject to recapture. Generally, an additional estate tax est in the income from the property. When J. Gilbert died,
must be paid by the qualified heir if the property is dis- the FMV of the property was $100,000. Depreciation de-
posed of, or is no longer used for a qualifying purpose ductions allowed before J. Gilbert's death were $20,000.
within 10 years of the decedent's death. D. Gilbert's basis in the property is $70,000 figured as fol-
lows:

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One-half of cost basis ( / of $60,000)1 2 . . . $30,000 For transitional guidance on the definitions of “qualified
Interest acquired from J. Gilbert appraisal” and “qualified appraiser,” see Notice 2006-96,
( / of $100,000)1 2 . . . . . . . . . . . . . . . . . 50,000 $80,000 2006-46 I.R.B. 902, available at IRS.gov/irb/2006-46_IRB/
Minus: / of $20,000 depreciation1 2 . . . . . . . . . . . . . . 10,000 ar13.html.
D. Gilbert's basis. . . . . . . . . . . . . . . . . . . . . . . . $70,000 The definitions apply to appraisals prepared for the fol-
lowing.
See Pub. 551, Basis of Assets, for more information on • Donated property for which a deduction of more than
basis. If the decedent and their spouse lived in a commun- $5,000 is claimed.
ity property state, see the discussion in that publication
about figuring the basis of community property after a • Returns filed after August 17, 2006.
spouse's death.
Holding period. If you sell or dispose of inherited prop-
Depreciation. If a beneficiary can depreciate inherited erty that is a capital asset, the gain or loss is considered
property, the Modified Accelerated Cost Recovery System long term, regardless of how long you held the property.
(MACRS) must be used to determine depreciation.
Property distributed in kind. Your basis in property
For joint interests and qualified joint interests, use the
distributed in kind by a decedent's estate is the same as
following computations to figure depreciation.
the estate's basis immediately before the distribution plus
• The first computation is for the original basis in the any gain, or minus any loss, recognized by the estate.
property. Property is distributed in kind if it satisfies your right to re-
• The second computation is for the inherited part of the ceive another property or amount, such as the income of
property. the estate or a specific dollar amount. Property distributed
in kind generally includes any noncash property you re-
Continue depreciating the original basis under the same ceive from the estate other than the following.
method used in previous years. Depreciate the inherited
part using MACRS. • A specific bequest (unless it must be distributed in
MACRS consists of two depreciation systems, the Gen- more than three installments).
eral Depreciation System (GDS) and the Alternative De- • Real property, the title to which passes directly to you
preciation System (ADS). For more information on under local law.
MACRS, see Pub. 946, How To Depreciate Property.
For information on an estate's recognized gain or loss on
Valuation misstatements. If the value or adjusted basis distributions in kind, see Income To Include under Income
of any property claimed on an income tax return is 150% Tax Return of an Estate—Form 1041, later.
or more of the amount determined to be the correct
amount, there is a substantial valuation misstatement. If Other Items of Income
the value or adjusted basis is 200% or more of the amount
determined to be the correct amount, there is a gross val- Some other items of income that a survivor or beneficiary
uation misstatement. may receive are discussed below. Lump-sum payments
received by the surviving spouse or beneficiary of a de-
Understatements. A substantial estate or gift tax valu- ceased employee may represent the following.
ation misstatement occurs when the value of property re-
ported is 65% or less of the actual value of the property. A • Accrued salary payments.
gross valuation misstatement occurs if any property on a • Distributions from employee profit-sharing, pension,
return is valued at 40% or less of the value determined to annuity, and stock bonus plans.
be correct.
• Other items that should be treated separately for tax
Penalty. If a misstatement results in an underpayment purposes.
of tax of more than $5,000, an addition to tax of 20% of
The treatment of these lump-sum payments depends on
the underpayment can apply. The penalty increases to
what the payments represent.
40% if the value or adjusted basis reported is a gross valu-
ation misstatement. Public safety officers. Special rules apply to certain
The IRS may waive all or part of the 20% addition to tax amounts received due to the death of a public safety offi-
(for substantial valuation overstatement) if the following cer (a law enforcement officer, fire fighter, chaplain, or
apply. member of an ambulance crew or rescue squad).
• The claimed value of the property was based on a The provisions for public safety officers apply to a
qualified appraisal made by a qualified appraiser. ! chaplain killed in the line of duty after September
• In addition to obtaining such appraisal, the taxpayer CAUTION 10, 2001, if the chaplain was responding to a fire,
made a good faith investigation of the value of the rescue, or police emergency as a member or employee of
contributed property. a fire or police department.

No waiver is available for the 40% addition to tax (for Death benefits. The death benefit payable to eligible
gross valuation overstatement). survivors of public safety officers who die as a result of

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traumatic injuries sustained in the line of duty isn't inclu- federal civil service employees or retirees, see Pub. 721,
ded in either the beneficiaries' income or the decedent's Tax Guide to U.S. Civil Service Retirement Benefits.
gross estate. This benefit is administered through the Bu-
reau of Justice Assistance (BJA). Inherited IRAs. If a person other than the decedent's
The BJA can pay the eligible survivors an emergency spouse inherits the decedent's traditional IRA or Roth IRA,
interim benefit up to $3,000 if it determines that a public that person can't treat the IRA as one established on the
safety officer's death is one for which a death benefit will person’s behalf. If a distribution from a traditional IRA is
probably be paid. If there is no final payment, the recipient from contributions that were deducted or from earnings
of the interim benefit is liable for repayment. However, the and gains in the IRA, it is fully taxable income. If there
BJA may waive all or part of the repayment if it will cause a were nondeductible contributions, an allocation between
hardship. Any repayment waived isn't included in income. taxable and nontaxable income must be made. For infor-
mation on distributions from a Roth IRA, see the discus-
Survivor benefits. Generally, a survivor annuity re- sion earlier under Income in Respect of a Decedent. The
ceived by the spouse, former spouse, or child of a public inherited IRA can't be rolled over into, or receive a rollover
safety officer killed in the line of duty is excluded from the from, another IRA. No deduction is allowed for amounts
recipient's income. The annuity must be provided under a paid into that inherited IRA. For more information about
government plan and is excludable to the extent that it is IRAs, see Pubs. 590-A and 590-B.
attributable to the officer's service as a public safety offi-
cer. Estate income. Estates may have to pay federal income
The exclusion doesn't apply if the recipient's actions tax. Beneficiaries may have to pay tax on their share of es-
were responsible for the officer's death. It also doesn't ap- tate income. However, there is never a double tax. See
ply in the following circumstances. Distributions to Beneficiaries, later.
• The death was caused by the intentional misconduct
of the officer or by the officer's intention to cause such
death. Income Tax Return of an
• The officer was voluntarily intoxicated at the time of
Estate—Form 1041
death.
• The officer was performing officer duties in a grossly An estate is a taxable entity separate from the decedent
negligent manner at the time of death. and comes into being with the death of the individual. It
exists until the final distribution of its assets to the heirs
Salary or wages. Salary or wages paid after the employ- and other beneficiaries. Income earned by the decedent
ee's death are usually taxable income to the beneficiary. up to and including the date of death is included on the
See Wages, earlier, under Specific Types of Income in Re- decedent's final Form 1040 tax return. Income received af-
spect of a Decedent. ter the date of death is included on the estate's Form 1041
If the decedent is a specified terrorist victim (see tax return. The tax is generally figured in the same manner
and on the same basis as for individuals, with certain dif-
! Specified Terrorist Victim, earlier), certain income ferences in the computation of deductions and credits, as
CAUTION received by the beneficiary or the estate isn't taxa-
ble. For more information, see Pub. 3920. explained later.
The estate's income, like an individual's income, must
Rollover distributions. An employee's surviving spouse be reported annually on either a calendar or fiscal year ba-
who receives an eligible rollover distribution may roll it sis. The personal representative chooses the estate's ac-
over tax free into an IRA, a qualified plan, a section 403 counting period upon filing the first Form 1041. The es-
annuity, or a section 457 plan. For more information, see tate's first tax year can be any period that ends on the last
Pub. 575, Pension and Annuity Income; and Form 4972, day of a month and doesn't exceed 12 months.
Tax on Lump-Sum Distributions.
Generally, once chosen, the tax year can't be changed
Rollovers by nonspouse beneficiary. A beneficiary without IRS approval. Also, on the first income tax return,
other than the employee's surviving spouse may be able the personal representative must choose the accounting
to roll over all or part of a distribution from an eligible re- method (cash, accrual, or other) to report the estate's in-
tirement plan of a deceased employee. The nonspouse come. Once a method is used, it ordinarily can't be
beneficiary must be the designated beneficiary of the em- changed without IRS approval. For a more complete dis-
ployee. The distribution must be a direct trustee-to-trustee cussion of accounting periods and methods, see Pub.
transfer to the beneficiary’s IRA set up to receive the distri- 538.
bution. The transfer will be treated as an eligible rollover
distribution and the receiving plan will be treated as an in- Filing Requirements
herited IRA. For more information on inherited IRAs, see
Pubs. 590-A and 590-B. Every domestic estate with gross income of $600 or more
during a tax year must file a Form 1041. If one or more of
Pensions and annuities. For beneficiaries who receive the beneficiaries of the domestic estate are nonresident
pensions and annuities, see Pub. 575. For beneficiaries of

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aliens, the personal representative must file Form 1041, income is distributed or must be distributed during the cur-
regardless of the estate’s gross income. rent tax year, the income is reportable by each beneficiary
on the beneficiary’s individual income tax return. If the in-
A fiduciary for a nonresident alien estate with come doesn't have to be distributed, and isn't distributed
U.S.-source income, including any income that is effec- but is retained by the estate, the income tax on the income
tively connected with the conduct of a trade or business in is payable by the estate. If the income is distributed later
the United States, must file Form 1040-NR as the income without the payment of the taxes due, the beneficiary can
tax return of the estate. be liable for tax due and unpaid to the extent of the value
A nonresident alien who was a resident of Puerto Rico, of the estate assets received.
Guam, American Samoa, or the Commonwealth of the Income of the estate is taxed to either the estate or the
Northern Mariana Islands for the entire tax year will, for beneficiary, but not to both.
this purpose, be treated as a resident alien of the United Nonresident alien beneficiary. In addition to filing
States. Form 1041, the personal representative may need to file
To establish Excess Deductions for the beneficiaries, a Form 1040-NR and pay the tax due, if any, if there is a
return must be filed for the estate along with a schedule nonresident alien beneficiary. There are a number of fac-
showing the computation of each kind of deduction and tors which determine whether a Form 1040-NR is re-
the allocation of each to the beneficiaries. quired. For information on who must file Form 1040-NR,
see Pub. 519, U.S. Tax Guide for Aliens.
Schedule K-1 (Form 1041) If a nonresident alien has an appointed agent in the
United States, the personal representative isn't responsi-
The personal representative must file a separate Sched- ble for filing Form 1040-NR and paying any tax due. How-
ule K-1 (Form 1041), Beneficiary's Share of Income, De- ever, a copy of the document appointing the agent must
ductions, Credits, etc., or an acceptable substitute (descri- be attached to the estate's Form 1041.
bed below), for each beneficiary. File these schedules The personal representative must also file Form 1042,
with Form 1041. Annual Withholding Tax Return for U.S. Source Income of
Foreign Persons, and Form 1042-S, Foreign Person's U.S.
The personal representative must ask each beneficiary Source Income Subject to Withholding, to report and
to provide a TIN, which must be reported on the Sched- transmit withheld tax on distributable net income (dis-
ule K-1 (Form 1041). A $50 penalty is charged for each cussed later) actually distributed. This applies to the ex-
failure to provide the identifying number of each benefi- tent the distribution consists of an amount subject to with-
ciary unless reasonable cause is established. A nonresi- holding. For more information, see Pub. 515.
dent alien beneficiary with a withholding certificate must
generally provide a TIN (see Pub. 515). A TIN isn't re- Amended Return
quired for an executor or administrator of the estate unless
that person is also a beneficiary. If an amended Form 1041 must be filed, use a copy of the
form for the appropriate year and check the “Amended re-
The personal representative must also give a Sched- turn” box. Complete the entire return, correct the appropri-
ule K-1 (Form 1041), or a substitute, to each beneficiary ate lines with the new information, and refigure the tax lia-
by the date on which the Form 1041 is filed. Failure to pro- bility. On an attached sheet, explain the reason for the
vide this payee statement can result in a penalty of $310 changes and identify the lines and amounts changed.
for each failure. This penalty also applies if information is
omitted or incorrect information is included on the payee Note. If the amended return results from an NOL loss
statement. If it is shown that such failure is due to inten- carryback, check the "Net operating loss carryback" box.
tional disregard of the filing requirement, the penalty For more information, see the Instructions for Form 1041.
amount increases.
If the amended return results in a change to income, or
No prior approval is needed for a substitute Sched- a change in distribution of any income or other information
ule K-1 (Form 1041) that is an exact copy of the official provided to a beneficiary, an amended Schedule K-1
schedule or that follows the specifications in Pub. 1167, (Form 1041) must be filed with Form 1041 and a copy
General Rules and Specifications for Substitute Forms given to each beneficiary. Check the “Amended K-1” box
and Schedules. Prior approval is required for any other at the top of Schedule K-1 (Form 1041).
substitute Schedule K-1 (Form 1041).
Beneficiaries. The personal representative has a fidu- Information Returns
ciary responsibility to the ultimate recipients of the income
Even though the personal representative may not have to
and the property of the estate. While the courts use a
file an income tax return for the estate, Form 1099-DIV,
number of names to designate specific types of beneficia-
Form 1099-INT, Form 1099-MISC, or Form 1099-NEC
ries or the recipients of various types of property, this pub-
may need to be filed if the estate received income as a
lication refers to all of them as “beneficiaries.”
nominee or middleman for another person. For more infor-
Liability of the beneficiary. The income tax liability of mation on filing information returns, see the General
an estate attaches to the assets of the estate. If the Instructions for Certain Information Returns.

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The personal representative will not have to file infor- amount of income in respect of a decedent. See Estate
mation returns for the estate if the estate is the owner of Tax Deduction under Other Tax Information, earlier.
record, Form 1041 is filed for the estate (reporting the
name, address, and identifying number of each actual Gain (or loss) from sale of property. During the admin-
owner), and a completed Schedule K-1 (Form 1041) is istration of the estate, the personal representative may
provided to each actual owner. find it necessary or desirable to sell all or part of the es-
tate's assets to pay debts and expenses of administration,
Penalty. A penalty of up to $310 can be charged for each or to make proper distributions of the assets to the benefi-
failure to file or failure to include correct information on an ciaries. While the personal representative may have the
information return. (Failure to include correct information legal authority to dispose of the property, title to it may be
includes failure to include all the information required.) If it vested (given a legal interest in the property) in one or
is shown that such failure is due to intentional disregard of more of the beneficiaries. This is usually true of real prop-
the filing requirement, the penalty amount increases. erty. To determine whether any gain or loss must be repor-
See the General Instructions for Certain Information ted by the estate or by the beneficiaries, consult local law
Returns for more information. to determine the legal owner.
Redemption of stock to pay death taxes. Under
Copy of the Will certain conditions, a distribution to a shareholder (includ-
ing the estate) in redemption of stock included in the de-
The personal representative does not have to include a cedent's gross estate may be allowed capital gain (or loss)
copy of the decedent's will with Form 1041. If the will is treatment.
later requested, attach a statement to it indicating the pro-
visions that determine how much of the estate's income is Character of asset. The character of an asset in the
taxable to the estate or to the beneficiaries. A statement hands of an estate determines whether gain or loss on its
signed by the personal representative under penalties of sale or other disposition is capital or ordinary. The asset's
perjury that the will is a true and complete copy should character depends on how the estate holds or uses it. If it
also be attached. was a capital asset to the decedent, it will generally be a
capital asset to the estate. If it was land or depreciable
property used in the decedent's business and the estate
Income To Include
continues the business, it will generally have the same
character to the estate that it had in the decedent's hands.
The estate's taxable income is generally figured the same
If it was held by the decedent for sale to customers, it will
way as an individual's income, except as explained in the
generally be considered to be held for sale to customers
following discussions.
by the estate if the decedent's business continues to oper-
If the decedent is a specified terrorist victim (see ate during the administration of the estate.
! Specified Terrorist Victim, earlier), certain income The gain from a sale of depreciable property be-
CAUTION received by the estate isn't taxable. See Pub.
tween an estate and a beneficiary of that estate
3920. CAUTION!
will be treated as ordinary income, unless the sale
or exchange was made to satisfy a pecuniary (cash) be-
Gross income of an estate consists of all items of in- quest.
come received or accrued during the tax year. It includes
dividends, interest, rents, royalties, gain from the sale of Sale of decedent's residence. If the estate is the le-
property, and income from business, partnerships, trusts, gal owner of a decedent's residence and the personal rep-
and any other sources. For a discussion of income from resentative sells it in the course of administration, the tax
dividends, interest, and other investment income, as well treatment of gain or loss depends on how the estate holds
as gains and losses from the sale of investment property, or uses the former residence. For example, if, as the per-
see Pub. 550, Investment Income and Expenses. For a sonal representative, you intend to realize the value of the
discussion of gains and losses from the sale of other prop- house through sale, the residence is a capital asset held
erty, including business property, see Pub. 544, Sales and for investment and gain or loss is capital gain or loss
Other Dispositions of Assets. (which may be deductible). This is the case even though it
was the decedent's personal residence and even if you
If the personal representative's duties include the oper-
didn't rent it out. If, however, the house isn't held for busi-
ation of the decedent's business, see Pub. 334. That pub-
ness or investment use (for example, if you intend to per-
lication provides general information about the tax laws
mit a beneficiary to live in the residence rent free and then
that apply to a sole proprietorship.
distribute it to the beneficiary to live in), and you later de-
Income in respect of a decedent. The personal repre- cide to sell the residence without first converting it to busi-
sentative of the estate may receive income the decedent ness or investment use, any gain is capital gain, but a loss
would have reported had death not occurred. For an ex- isn't deductible.
planation of this income, see Income in Respect of a De- Holding period. An estate (or other recipient) that ac-
cedent under Other Tax Information, earlier. An estate quires property from a decedent and sells or otherwise
may qualify to claim a deduction for estate taxes if the es- disposes of it is considered to have held that property for
tate must include in gross income for any tax year an

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more than 1 year, no matter how long the estate and the         accept contributions or make expenditures for influencing 
decedent actually held the property.                            the nomination, election, or appointment of an individual 
                                                                to any federal, state, or local public office.
Basis  of  property. The  basis  used  to  figure  gain  or 
loss for property the estate receives from the decedent is      Gain or loss on distributions in kind.        An estate recog-
usually its FMV at the date of death. See    Basis of Inheri-   nizes gain or loss on a distribution of property in kind to a 
ted Property under Other Tax Information, earlier, for other    beneficiary only in the following situations.
basis in inherited property.
If  the  estate  purchases  property  after  the  decedent's    1. The distribution satisfies the beneficiary's right to re-
death, the basis will generally be its cost.                    ceive either of the following.
The basis of certain appreciated property the estate re-             a. A specific dollar amount (whether payable in cash, 
ceives from the decedent will be the decedent's adjusted                in unspecified property, or in both).
basis in the property immediately before death. This ap-
plies if the property was acquired by the decedent as a gift         b. A specific property other than the property distrib-
during the 1-year period before death, the property's FMV               uted.
on the date of the gift was greater than the donor's adjus-     2. An election is made to recognize the gain or loss on 
ted basis, and the proceeds of the sale of the property are     the estate's income tax return (section 643(e)(3) elec-
distributed to the donor (or the donor's spouse).               tion).
Schedule D (Form 1041) and Form 8949.               Use Form    The  gain  or  loss  is  usually  the  difference  between  the 
8949, Sales and Other Dispositions of Capital Assets, to        FMV of the property when distributed and the estate's ba-
report  most  sales  and  exchanges  of  capital  assets.  Use  sis in the property. However, see Gain from sale of spe-
Schedule D (Form 1041), Capital Gains and Losses, to re-        cial-use valuation property, earlier, for a limit on the gain 
port the overall capital gains and losses from transactions     recognized  on  a  transfer  of  such  property  to  a  qualified 
reported  on  Form  8949,  certain  transactions  that  don't   heir.
have to be reported on Form 8949, and certain other capi-       If you elect to recognize gain or loss, the election ap-
tal gains and losses. For additional information, see the In-   plies to all noncash distributions during the tax year except 
structions for Form 8949 and the Instructions for Sched-        charitable  distributions  and  specific  bequests.  To  make 
ule D (Form 1041).                                              the election, report the transaction on Form 8949 and/or 
                                                                Schedule  D  (Form  1041),  as  applicable,  and  check  the 
Installment  obligations.   If  an  installment  obligation 
                                                                box on Form 1041, Other Information, line 7. The election 
owned by the decedent is transferred by the estate to the 
                                                                must be made by the due date (including extensions) of 
obligor (buyer or person obligated to pay) or is canceled at 
                                                                the estate's income tax return for the year of distribution. 
death, include the income from that event in the gross in-
                                                                However,  if  the  return  is  timely  filed  without  making  the 
come of the estate. See Installment obligations under In-
                                                                election, the election can be made by filing an amended 
come in Respect of a Decedent, earlier. See Pub. 537 for 
                                                                return within 6 months of the due date of the return (ex-
information about installment sales.
                                                                cluding extensions). Attach Form 8949 and/or Schedule D 
Gain  from  sale  of  special-use  valuation  property. If      (Form  1041),  as  applicable,  to  the  amended  return  and 
the personal representative elected special-use valuation       enter “Filed pursuant to section 301.9100-2” on the form. 
for farm or other closely held business real property and       File the amended return at the same address you filed the 
that property is sold to a qualified heir, the estate will rec- original return. IRS consent is required to revoke the elec-
ognize gain on the sale if the FMV on the date of the sale      tion.
exceeds the FMV on the date of the decedent's death (or         For  more  information,  see Property  distributed  in  kind 
on the alternate valuation date if it was elected).             under Income Distribution Deduction, later.
Qualified heirs.   Qualified heirs include the decedent's               Under  the  related  persons  rules,  a  loss  can't  be 
ancestors  (parents,  grandparents,  etc.)  and  spouse,  the   !       claimed  for  property  distributed  to  a  beneficiary 
decedent's  lineal  descendants  (children,  grandchildren,     CAUTION unless the distribution is in discharge of a pecuni-
etc.) and their spouses, and lineal descendants (and their      ary bequest. Also, any gain on the distribution of deprecia-
spouses) of the decedent's parents or spouse.                   ble property is ordinary income.
For more information about special-use valuation, see 
Form 706 and its instructions.
                                                                Exemption and Deductions
Gain from transfer of property to a political organiza-
                                                                In figuring taxable income, an estate is generally allowed 
tion. Appreciated property transferred to a political organ-
                                                                the same deductions as an individual. Special rules, how-
ization is treated as sold by the estate. Appreciated prop-
                                                                ever, apply to some deductions for an estate. This section 
erty  is  property  that  has  an  FMV  (on  the  date  of  the 
                                                                includes discussions of those deductions affected by the 
transfer) greater than the estate's basis. The gain recog-
                                                                special rules.
nized is the difference between the estate's basis and the 
FMV on the date transferred.
A political organization is any party, committee, associ-
ation, fund, or other organization formed and operated to 

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Exemption Deduction An estate and a beneficiary of that estate are gen-
erally treated as related persons for purposes of
An estate is allowed an exemption deduction of $600 in CAUTION! the disallowance of a loss on the sale of an asset
figuring its taxable income. No exemption for dependents between related persons. The disallowance doesn't apply
is allowed to an estate. Even though the first return of an to a sale or exchange made to satisfy a pecuniary be-
estate may be for a period of less than 12 months, the ex- quest.
emption is $600. If, however, the estate was given permis-
sion to change its accounting period, the exemption is $50 Net operating loss deduction. An estate can claim a
for each month of the short year. net operating loss (NOL) deduction, figured in the same
way as an individual's, except that it can't take the income
Charitable Contributions distribution deduction (discussed later) or the deduction
for charitable contributions in figuring the loss or the loss
An estate qualifies for a deduction for gross income paid carryover. For a discussion of the carryover of an unused
or permanently set aside for qualified charitable organiza- NOL to a beneficiary upon termination of the estate, see
tions. The AGI limits for individuals don't apply. However, Termination of Estate, later.
to be deductible by an estate, the contribution must be For information on NOLs, see Pub. 536.
specifically provided for in the decedent's will. If there is
no will, or if the will makes no provision for the payment to Casualty and theft losses. Losses incurred from casu-
a charitable organization, then a deduction won't be al- alties and thefts during the administration of the estate
lowed even though all beneficiaries may agree to the gift. can be deducted only if they haven't been claimed on the
federal estate tax return (Form 706). The personal repre-
You can't deduct any contribution unless it is attributa- sentative must file a statement with the estate's income
ble to the estate's gross income. Therefore, amounts dis- tax return waiving the deduction for estate tax purposes.
tributed to a qualified charity from the estate's tax-exempt See Administration Expenses, later.
income or corpus (principal) do not qualify for the charita- The same rules that apply to individuals apply to the es-
ble contribution deduction. If the will specifically provides tate, except that in figuring the AGI of the estate used to
that the contributions are to be paid out of the estate's figure the deductible loss, you deduct any administration
gross income, the contributions are fully deductible to the expenses claimed. Use Form 4684, Casualties and
extent this provision in the will has economic effect inde- Thefts, and its instructions to figure any loss deduction.
pendent of income tax consequences. However, if the pro-
vision lacks economic effect or the will provides that such Carryover losses. Carryover losses resulting from NOLs
contributions are paid out the of the estate's income, but or capital losses sustained by the decedent before death
contains no specific provisions regarding character (for can't be deducted on the estate's income tax return.
example, gross income or tax-exempt income), then the
contributions are considered to consist of the same pro- Administration Expenses
portion of each class of the items of income of the estate
as the total of each class bears to the total of all classes. Expenses of administering an estate can be deducted ei-
ther from the gross estate in figuring the federal estate tax
You can't deduct a qualified conservation easement on Form 706 or from the estate's gross income in figuring
granted after the date of death and before the due date of the estate's income tax on Form 1041. However, these ex-
the estate tax return. A contribution deduction is allowed penses can't be claimed for both estate tax and income
to the estate for estate tax purposes. tax purposes. In most cases, this rule also applies to ex-
penses incurred in the sale of property by an estate (not
For more information about contributions, see Pub.
as a dealer).
526, Charitable Contributions, and Pub. 561, Determining
the Value of Donated Property. To prevent a double deduction, amounts otherwise al-
lowable in figuring the decedent's taxable estate for fed-
Losses eral estate tax on Form 706 won't be allowed as a deduc-
tion in figuring the income tax of the estate or of any other
Generally, an estate can claim a deduction for a loss it person unless the personal representative files a state-
sustains on the sale of property. This includes a loss from ment, in duplicate, that the items of expense, as listed in
the sale of property (other than stock) to a personal repre- the statement, haven't been claimed as deductions for
sentative of the estate, unless that person is a beneficiary federal estate tax purposes and that all rights to claim
of the estate. such deductions are waived. One deduction or part of a
For a discussion of an estate's recognized loss on a deduction can be claimed for income tax purposes if the
distribution of property in kind to a beneficiary, see Income appropriate statement is filed, while another deduction or
To Include, earlier. part is claimed for estate tax purposes. Claiming a deduc-
tion in figuring the estate income tax isn't prevented when
the same deduction is claimed on the estate tax return so
long as the estate tax deduction isn't finally allowed and
the preceding statement is filed. The statement can be
filed with the income tax return or at any time before the

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expiration of the statute of limitations that applies to the come, excluding the income distribution deduction, with
tax year for which the deduction is sought. This waiver the following additional modifications.
procedure also applies to casualty losses incurred during
Tax-exempt interest. Tax-exempt interest, including
administration of the estate.
exempt-interest dividends, is included in the distributable
Accrued expenses. The rules preventing double deduc- net income but is reduced by the following items.
tions don't apply to deductions for taxes, interest, busi- • Expenses not allowed in computing the estate's taxa-
ness expenses, and other items accrued at the date of ble income because they were attributable to tax-ex-
death. These expenses are allowable as a deduction for empt interest (see Expenses allocable to tax-exempt
estate tax purposes as claims against the estate and are income under Administration Expenses, earlier).
also allowable as deductions in respect of a decedent for
income tax purposes. Deductions for interest, business • The portion of tax-exempt interest deemed to have
expenses, and other items not accrued at the date of the been used to make a charitable contribution. See
decedent's death are allowable only as a deduction for ad- Charitable Contributions, earlier.
ministration expenses for both estate and income tax pur- The total tax-exempt interest earned by an estate must
poses and don't qualify for a double deduction. be shown on Form 1041, Other Information, line 1. The
beneficiary's portion of the tax-exempt interest is shown
Expenses allocable to tax-exempt income. When fig- on Schedule K-1 (Form 1041).
uring the estate's taxable income on Form 1041, you can't
deduct administration expenses allocable to any of the es- Exemption deduction. The exemption deduction isn't
tate's tax-exempt income. However, you can deduct these allowed.
administration expenses when figuring the taxable estate Capital gains. Capital gains aren't automatically inclu-
for federal estate tax purposes on Form 706. ded in distributable net income. However, they can be in-
cluded in distributable net income if any of the following
Interest on estate tax. Interest paid on installment pay-
apply.
ments of estate tax isn't deductible for income or estate
tax purposes. • The gain is allocated to income in the accounts of the
estate or by notice to the beneficiaries under the terms
Depreciation and Depletion of the will or by local law.
• The gain is allocated to the corpus or principal of the
The allowable deductions for depreciation and depletion estate and is actually distributed to the beneficiaries
that accrue after the decedent's death must be appor- during the tax year.
tioned between the estate and the beneficiaries, depend-
ing on the income of the estate allocable to each. • The gain is used, under either the terms of the will or
the practice of the personal representative, to deter-
An estate can't elect to treat the cost of certain mine the amount that is distributed or must be distrib-
! depreciable business assets as an expense un- uted.
CAUTION der section 179.
• Charitable contributions are made out of capital gains.
Example. In 2023, the decedent's estate realized Generally, when you determine capital gains to be in-
$3,000 of business income during the administration of cluded in distributable net income, the exclusion for gain
the estate. The personal representative distributed $1,000 from the sale or exchange of qualified small business
of the income to the decedent's child, Alex, and $2,000 to stock isn't taken into account.
the second child, Jo. The allowable depreciation on the Capital losses. Capital losses are excluded in figuring
business property is $300. Alex can take a deduction of distributable net income unless they enter into the compu-
$100 [($1,000 ÷ $3,000) × $300], and Jo can take a de- tation of any capital gain that is distributed or must be dis-
duction of $200 [($2,000 ÷ $3,000) × $300]. tributed during the year.

Income Distribution Deduction Separate shares rule. The separate shares rule must be
used if both of the following are true.
An estate is allowed a deduction for the tax year for any in- • The estate has more than one beneficiary.
come that must be distributed currently and for other
amounts that are properly paid, credited, or required to be • The economic interest of a beneficiary doesn't affect
distributed to beneficiaries. This deduction is limited to the and isn't affected by the economic interest of another
distributable net income of the estate. beneficiary.
A bequest of a specific sum of money or of property isn't a
For special rules about distributions that apply in figur- separate share (see Bequest, later).
ing the estate's income distribution deduction, see Be- If the separate shares rule applies, the separate shares
quest under Distributions to Beneficiaries, later. are treated as separate estates for the sole purpose of de-
termining the distributable net income allocable to a share.
Distributable net income. Distributable net income (fig- Each share's distributable net income is based on that
ured on Form 1041, Schedule B) is the estate's taxable in- share's portion of gross income and any applicable

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deductions or losses. The personal representative must income. The maximum amount of Jamie's share that could
use a reasonable and equitable method to make the allo- be funded with that income is $150,000 ($450,000 value
cations. of share less $300,000 funded with stock). The maximum
Generally, gross income is allocated among the sepa- amount of Ash's share that could be funded is $450,000.
rate shares based on the income each share is entitled to Based on the relative values, Jamie's distributable net in-
under the will or applicable local law. This includes gross come includes $22,500 ($150,000/$600,000 x $90,000) of
income not received in cash, such as a distributive share the income in respect of a decedent and Ash's distributa-
of partnership tax items. ble net income includes $67,500 ($450,000/$600,000 x
If a beneficiary isn't entitled to any of the estate's in- $90,000).
come, the distributable net income for that beneficiary is
zero. The estate can't deduct any distribution made to that Income required to be distributed currently. The in-
beneficiary and the beneficiary doesn't have to include the come distribution deduction includes any income that, un-
distribution in its gross income. However, see Income in der the terms of the decedent's will or by reason of local
Respect of a Decedent, later in this discussion. law, must be distributed currently. This includes an amount
that may be paid out of income or corpus (such as an an-
Example. Pat's will directs you, the executor, to distrib- nuity) to the extent it is paid out of income for the tax year.
ute ABC Corporation stock and all dividends from that The deduction is allowed to the estate even if the personal
stock to Pat’s child, Eli, and the residue of the estate to representative doesn't make the distribution until a later
Pat’s second child, Morgan. The estate has two separate year or makes no distribution until the final settlement and
shares consisting of the dividends on the stock left to Eli termination of the estate.
and the residue of the estate left to Morgan. The distribu-
tion of the ABC Corporation stock qualifies as a bequest, Any other amount paid, credited, or required to be
so it isn't a separate share. distributed. Any other amount paid, credited, or required
If any distributions, other than the ABC Corporation to be distributed is included in the income distribution de-
stock, are made during the year to either Eli or Morgan, duction of the estate only in the year actually paid, credi-
you must determine the distributable net income for each ted, or distributed. If there is no specific requirement by lo-
separate share. The distributable net income for Eli's sep- cal law or by the terms of the will that income earned by
arate share includes only the dividends attributable to the the estate during administration be distributed currently, a
ABC Corporation stock. The distributable net income for deduction for distributions to the beneficiaries will be al-
Morgan's separate share includes all other income. lowed to the estate, but only for the actual distributions
during the tax year.
Income in respect of a decedent. This income is al-
located among the separate shares that could potentially If the personal representative has discretion as to when
be funded with these amounts, even if the share isn't enti- the income is distributed, the deduction is allowed only in
tled to receive any income under the will or applicable lo- the year of distribution.
cal law. This allocation is based on the relative value of
each share that could potentially be funded with these The personal representative can elect to treat distribu-
amounts. tions paid or credited within 65 days after the close of the
estate's tax year as having been paid or credited on the
Example 1. Frankie's will directs you, the executor, to last day of that tax year. The election is made by complet-
divide the residue of the estate (valued at $900,000) ing Form 1041, Other Information, line 6. If a tax return
equally between Frankie’s two children, Jamie and Ash. isn't required, the election is made on a statement filed
Under the will, you must fund Jamie’s share first with the with the IRS office where the return would have been filed.
proceeds of Frankie's traditional IRA. The $90,000 bal- The election is irrevocable for the tax year and is only ef-
ance in the IRA was distributed to the estate during the fective for the year of the election.
year. This amount is included in the estate's gross income
as income in respect of a decedent and is allocated to the Interest in real estate. The value of an interest in real
corpus of the estate. The estate has two separate shares, estate owned by a decedent, title to which passes directly
one for the benefit of Jamie and one for the benefit of Ash. to the beneficiaries under local law, isn't included as any
If any distributions are made to either Jamie or Ash during other amount paid, credited, or required to be distributed.
the year, then, for purposes of determining the distributa- Property distributed in kind. If an estate distributes
ble net income for each separate share, the $90,000 of in- property in kind, the estate's deduction is ordinarily the
come in respect of a decedent must be allocated only to lesser of its basis in the property or the property's FMV
Jamie's share. when distributed. However, the deduction is the property's
FMV if the estate recognizes gain on the distribution. See
Example 2. Assume the same facts as in Example 1,
Gain or loss on distributions in kind under Income To In-
except that you must fund Jamie's share first with DEF
clude, earlier.
Corporation stock valued at $300,000, instead of the IRA
Property is distributed in kind if it satisfies the benefi-
proceeds. To determine the distributable net income for
ciary's right to receive another property or amount, such
each separate share, the $90,000 of income in respect of
as the income of the estate or a specific dollar amount. It
a decedent must be allocated between the two shares to
the extent they could potentially be funded with that

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generally includes any noncash distribution other than the beginning with the day after the decedent's death, you can
following. elect to deduct them on the decedent's income tax return
(Form 1040 or 1040-SR) for the year in which they were
• A specific bequest (unless it must be distributed in
incurred. See Medical Expenses under Final Income Tax
more than three installments).
Return for Decedent—Form 1040 or 1040-SR, earlier.
• Real property, the title to which passes directly to the
beneficiary under local law.
Credits, Tax, and Payments
Tax-exempt income not deductible. The estate can't
take an income distribution deduction for any item of dis- This section includes brief discussions of some of the tax
tributable net income not included in the estate's gross in- credits, types of taxes that may be owed, and estimated
come. tax payments reported on the estate's Form 1041.

Example. An estate has distributable net income of Credits
$2,000, consisting of $1,000 of dividends and $1,000 of
tax-exempt interest. Distributions to the beneficiary total Estates are generally allowed some of the same tax cred-
$1,500. Except for this rule, the income distribution deduc- its that are allowed to individuals. The credits are gener-
tion would be $1,500 ($750 of dividends and $750 of ally allocated between the estate and the beneficiaries.
tax-exempt interest). However, as the result of this rule, However, estates aren't allowed the credit for the elderly or
the income distribution deduction is limited to $750, be- the disabled, the child tax credit, or the earned income
cause no deduction is allowed for the tax-exempt interest credit discussed earlier under Final Income Tax Return for
distributed. Decedent—Form 1040 or 1040-SR.

Denial of double deduction. A deduction can't be Foreign tax credit. The foreign tax credit is discussed in
claimed twice. If an amount is considered to have been Pub. 514, Foreign Tax Credit for Individuals.
distributed to a beneficiary of an estate in a preceding tax
year, it can't again be included in figuring the deduction for General business credit. The general business credit is
the year of the actual distribution. available to an estate involved in a business. For more in-
formation, see Pub. 334.
Example. The decedent's will provides that the estate
must distribute currently all of its income to a beneficiary. Tax
For administrative convenience, the personal representa-
tive didn't make a distribution of part of the income for the You can't use the Tax Table for individuals to figure the es-
tax year until the first month of the next tax year. The tate tax. You must use the tax rate schedule in the Instruc-
amount must be deducted by the estate in the first tax tions for Form 1041 to figure the estate tax.
year, and must be included in the income of the benefi-
ciary in that year. This amount can't be deducted again by Alternative minimum tax (AMT). An estate may be lia-
the estate in the following year when it is paid to the bene- ble for the AMT. To figure the AMT, use Schedule I (Form
ficiary, nor must the beneficiary again include the amount 1041), Alternative Minimum Tax—Estates and Trusts. Cer-
in income in that year. tain credits may be limited by any tentative minimum tax
figured on Schedule I (Form 1041), Part III, line 52, even if
Charitable contribution. Any amount allowed as a char- there is no AMT liability.
itable deduction by the estate in figuring the estate's taxa- If the estate takes a deduction for distributions to bene-
ble income can't be claimed again as a deduction for a ficiaries, complete Parts I and II of Schedule I (Form 1041)
distribution to a beneficiary. even if the estate doesn't owe AMT. Allocate the income
distribution deduction figured on a minimum tax basis
Funeral and Medical Expenses among the beneficiaries and report each beneficiary's
share on Schedule K-1 (Form 1041). Also, show each
No deduction can be taken for funeral expenses or medi- beneficiary's share of any adjustments or tax preference
cal and dental expenses on the estate's Form 1041. items for depreciation, depletion, and amortization.
For more information, see the Instructions for Sched-
Funeral expenses. Funeral expenses paid by the estate ule I (Form 1041).
aren't deductible in figuring the estate's taxable income on
Form 1041. They are deductible only for determining the
taxable estate for federal estate tax purposes on Form Payments
706.
The estate's income tax liability must be paid in full when
Medical and dental expenses of a decedent. The the return is filed. You may have to pay estimated tax,
medical and dental expenses of a decedent paid by the however, as explained below.
estate aren't deductible in figuring the estate's taxable in-
come on Form 1041. You can deduct them in figuring the Estimated tax. Estates with tax years ending 2 or more
taxable estate for federal estate tax purposes on Form years after the date of the decedent's death must pay esti-
706. If these expenses are paid within the 1-year period mated tax in the same manner as individuals.

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If you must make estimated tax payments for 2024, use a calendar year or a fiscal year as the estate's accounting
Form 1041-ES, Estimated Income Tax for Estates and period. Where Form 1041 is filed depends on where the
Trusts, to determine the estimated tax to be paid. personal representative lives or has their principal busi-
Generally, you must pay estimated tax if the estate is ness office.
expected to owe, after subtracting any withholding and
credits, at least $1,000 in tax for 2024. You won't, however, When to file. If the calendar year is the estate's account-
have to pay estimated tax if you expect the withholding ing period, the 2023 Form 1041 is due by April 15, 2024
and credits to be at least: (June 15, 2024, in the case of Form 1040-NR for a non-
resident alien estate that doesn't have an office in the Uni-
1. 90% of the tax to be shown on the 2024 return, or ted States). If the personal representative chooses a fiscal
2. 100% of the tax shown on the 2023 return (assuming year, Form 1041 is due by the 15th day of the 4th month
the return covered all 12 months). (6th month for a Form 1040-NR) after the end of the tax
year. If the due date is a Saturday, Sunday, or legal holi-
The percentage in (2) above is 110% if the estate's 2023 day, the form must be filed by the next business day.
AGI was more than $150,000 (and less than / of gross 2 3
income for 2023 and 2024 is from farming or fishing). To Extension of time to file. An automatic 5 / -month 1 2
figure the estate's AGI, see the Instructions for Form 1041. extension of time to file Form 1041 can be requested by
The general rule is that the first estimated tax payment filing Form 7004, Application for Automatic Extension of
must be made by the 15th day of the 4th month of the tax Time To File Certain Business Income Tax, Information,
year (whether calendar or fiscal). The estimated tax may and Other Returns. The extension is automatic, so no sig-
be paid in full at that time or paid in four equal installments nature or reason for the request is required. File Form
on the 15th day of the 4th, 6th, and 9th months of the tax 7004 on or before the regular due date of Form 1041.
year, and the 1st month of the following tax year. If any of Form 7004 can be electronically filed. For additional infor-
these dates fall on a Saturday, Sunday, or legal holiday, mation, see the Instructions for Form 7004.
the payment must be made by the next business day. For An extension of time to file a return doesn't extend the
2024, a calendar year taxpayer's estimated tax payments time for payment of tax due. The total income tax estima-
are due on April 15, 2024; June 15, 2024; September 15, ted to be due on Form 1041 must be paid in full by the reg-
2024; and January 15, 2025. ular due date of the return. For additional information, see
For exceptions to the general rule, see the Instructions the Instructions for Form 7004.
for Form 1041-ES and Pub. 505, Tax Withholding and Es-
Where to file. The personal representative of an estate
timated Tax.
files the estate's income tax return (Form 1041) with the
A penalty may be charged for not paying enough esti-
Internal Revenue Service Center assigned to the state
mated tax or for not making the payment on time in the re-
where the personal representative lives or has their princi-
quired amount (even if there is an overpayment on the tax
pal place of business. A list of the states and assigned
return). Use Form 2210, Underpayment of Estimated Tax
Service Centers is in the Instructions for Form 1041.
by Individuals, Estates, and Trusts, to figure any penalty,
Form 1040-NR must be filed at the following address:
or let the IRS figure the penalty.
For more information, see the Instructions for Form Department of the Treasury
1041-ES and Pub. 505. Also, see Transfer of Credit for Es- Internal Revenue Service
timated Tax Payments, later, for information regarding the Kansas City, MO 64999 USA
transfer of the estate's estimated tax payments to the ben-
eficiary(ies). If enclosing a payment, mail Form 1040-NR to:

Name, Address, and Signature Internal Revenue Service
P.O. Box 1303
In the top space of the name and address area of Form Charlotte, NC 28201-1303 USA
1041, enter the exact name of the estate used to apply for
the estate's EIN. In the remaining spaces, enter the name Electronic filing. Form 1041 can be filed electroni-
and address of the personal representative of the estate. cally. See the instructions for more information.
Signature. The personal representative (or its authorized Private delivery services (PDSs). Filers can use cer-
officer if the personal representative isn't an individual) tain PDSs designated by the IRS to meet the “timely mail-
must sign the return. An individual who prepares the re- ing as timely filing” rule for tax returns. Go to IRS.gov/PDS
turn for pay must sign the return as preparer. You can for the current list of designated services.
check a box in the signature area that authorizes the IRS The PDS can tell you how to get written proof of the
to contact that paid preparer for certain information. See mailing date.
the Instructions for Form 1041 for more information. For the IRS mailing address to use if you're using a
PDS, go to IRS.gov/PDSStreetAddresses.
When and Where To File PDSs can’t deliver items to IRS P.O. boxes. You
must use the U.S. Postal Service to mail any items
When Form 1041 (or Form 1040-NR if it applies) is filed CAUTION! to an IRS P.O. box address.
depends on whether the personal representative chooses

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Example 1. H. Frank's will provides that $500 be paid
to the local Community Chest out of income each year. It
Distributions to Beneficiaries also provides that $2,000 a year is currently distributable
out of income to H. Frank’s sibling, Charlie, and an annuity
If you are the beneficiary of an estate that is required to of $3,000 is to be paid to H. Frank’s other sibling, Jessie,
distribute all its income currently, you must report your out of income or corpus. Capital gains are allocable to cor-
share of the distributable net income, whether or not you pus, but all expenses are to be charged against income.
have actually received the distribution. Last year, the estate had income of $6,000 and expenses
If you are a beneficiary of an estate that isn't required to of $3,000. The personal representative paid $500 to the
distribute all its income currently, you must report all in- Community Chest and made the distributions to Charlie
come that is required to be distributed to you currently and Jessie as required by the will.
(whether or not actually distributed), plus all other The estate's distributable net income (figured before
amounts paid, credited, or required to be distributed to the charitable contribution) is $3,000. The currently distrib-
you, up to your share of distributable net income. As ex- utable income totals $2,500 ($2,000 to Charlie and $500
plained earlier under Income Distribution Deduction, for to Jessie). The income available for Jessie’s annuity is
an amount to be income required to be distributed cur- only $500 because the will requires that the charitable
rently, there must be a specific requirement for current dis- contribution be paid out of current income. The $2,500
tribution either under local law or the terms of the dece- treated as distributed currently is less than the $3,000 dis-
dent's will. If there is no such requirement, the income is tributable net income (before the contribution), so $2,000
reportable only when distributed. must be included in Charlie’s gross income and $500
must be included in Jessie’s gross income.
If the estate has more than one beneficiary, the sepa-
rate shares rule discussed earlier under Income Distribu- Example 2. Assume the same facts as in Example 1,
tion Deduction may have to be used to determine the dis- except the estate has an additional $1,000 of administra-
tributable net income allocable to each beneficiary. The tion expenses, commissions, etc., chargeable to corpus.
beneficiaries in the examples shown next don't meet the The estate's distributable net income (figured before the
requirements of the separate shares rule. charitable contribution) is now $2,000 ($3,000 − $1,000
additional expense). The amount treated as currently dis-
tributable income is still $2,500 ($2,000 to Charlie and
Income That Must Be Distributed $500 to Jessie). The $2,500 treated as distributed cur-
Currently rently is more than the $2,000 distributable net income, so
$1,600 [($2,000 ÷ $2,500) × $2,000] must be included in
Beneficiaries entitled to receive currently distributable in- Charlie’s gross income and $400 [($500 ÷ $2,500) ×
come must generally include in gross income the entire $2,000] must be included in Jessie’s gross income. Char-
amount due them. However, if the income required to be lie and Jessie are beneficiaries of amounts that must be
distributed currently is more than the estate's distributable distributed currently, so they don't benefit from the reduc-
net income figured without deducting charitable contribu- tion of distributable net income by the charitable contribu-
tions, each beneficiary must include in gross income a rat- tion deduction.
able part of the distributable net income.
Other Amounts Distributed
Example. Under the terms of the will of G. Peters,
$5,000 a year is to be paid to the surviving spouse and Any other amount paid, credited, or required to be distrib-
$2,500 a year is to be paid to G. Peter’s child, Cameron, uted to the beneficiary for the tax year must also be inclu-
out of the estate's income during the period of administra- ded in the beneficiary's gross income. Such an amount is
tion. There are no charitable contributions. For the year, in addition to those amounts that are required to be dis-
the estate's distributable net income is only $6,000. The tributed currently, as discussed earlier. It doesn't include
distributable net income is less than the currently distribut- gifts or bequests of specific sums of money or specific
able income, so only $4,000 [($5,000 ÷ $7,500) × $6,000] property if such sums are paid in three or fewer install-
must be reported in the surviving spouse’s gross income, ments. However, amounts that can be paid only out of in-
and only $2,000 [($2,500 ÷ $7,500) × $6,000] must be re- come aren't excluded under this rule. If the sum of the in-
ported in Cameron’s gross income. come that must be distributed currently and other
amounts paid, credited, or required to be distributed ex-
Annuity payable out of income or corpus. Income that
ceeds distributable net income, these other amounts are
is required to be distributed currently includes any amount
included in the beneficiary's gross income only to the ex-
that must be paid out of income or corpus (principal of the
tent distributable net income exceeds the income that
estate) to the extent the amount is satisfied out of income
must be distributed currently. If there is more than one
for the tax year. An annuity that must be paid in all events
beneficiary, each will include in gross income only a pro
(either out of income or corpus) would qualify as income
rata share of such amounts.
that is required to be distributed currently to the extent
there is income of the estate not paid, credited, or re- The personal representative can elect to treat distribu-
quired to be distributed to other beneficiaries for the tax tions paid or credited by the estate within 65 days after the
year.

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close of the estate's tax year as having been paid or credi- The beneficiary's legal obligations include a legal obli-
ted on the last day of that tax year. gation of support, for example, of a minor child. Local law
determines a legal obligation of support.
The following are examples of other amounts distrib-
uted.
Character of Distributions
• Distributions made at the discretion of the personal
representative. An amount distributed to a beneficiary for inclusion in
• Distributions required by the terms of the will when a gross income retains the same character for the benefi-
specific event occurs. ciary that it had for the estate.

• Annuities that must be paid in any event, but only out No charitable contribution made. If no charitable con-
of corpus (principal). tribution is made during the tax year, treat the distributions
• Distributions of property in kind as defined earlier un- as consisting of the same proportion of each class of
der Income Distribution Deduction, under Income Tax items entering into the computation of distributable net in-
Return of an Estate—Form 1041. come as the total of each class bears to the total distribut-
able net income. Distributable net income was defined
• Distributions required for the support of the decedent's earlier under Income Distribution Deduction, under In-
surviving spouse or other dependent for a limited pe- come Tax Return of an Estate—Form 1041. However, if
riod, but only out of corpus (principal). the will or local law specifically provides or requires a dif-
If an estate distributes property in kind, the amount of ferent allocation, use that allocation.
the distribution is ordinarily the lesser of the estate's basis
Example 1. An estate has distributable net income of
in the property or the property's FMV when distributed.
$3,000, consisting of $1,800 in rents and $1,200 in taxa-
However, the amount of the distribution is the property's
ble interest. There is no provision in the will or local law for
FMV if the estate recognizes gain on the distribution. See
the allocation of income. The personal representative dis-
Gain or loss on distributions in kind in the discussion In-
tributes $1,500 each to Harper and Drew, beneficiaries in
come To Include, earlier.
their parent’s will. Each will be treated as having received
Example. The terms of M. Scott's will require the distri- $900 in rents and $600 of taxable interest.
bution of $2,500 of income annually to M. Scott’s spouse,
Example 2. Assume in Example 1 that the will pro-
Reese. If any income remains, it may be accumulated or
vides for the payment of the taxable interest to Harper and
distributed to M. Scott’s two children, Joe and Alex, in
the rental income to Drew and that the personal represen-
amounts at the discretion of the personal representative.
tative distributed the income under those provisions.
The personal representative may also invade the corpus
Harper is treated as having received $1,200 in taxable in-
(principal) for the benefit of M. Scott's spouse and chil-
terest and Drew is treated as having received $1,800 of
dren.
rental income.
Last year, the estate had income of $6,000 after deduc-
tion of all expenses. Its distributable net income is also Charitable contribution made. If a charitable contribu-
$6,000. The personal representative distributed the re- tion is made by an estate and the terms of the will or local
quired $2,500 of income to Reese. In addition, the per- law provide for the contribution to be paid from specified
sonal representative distributed $1,500 each to Joe and sources, that provision governs. If no provision or require-
Alex and an additional $2,000 to Reese. ment exists, the charitable contribution deduction must be
Reese includes $2,500 of currently distributable in- allocated among the classes of income entering into the
come in gross income. The other amounts distributed to- computation of the income of the estate before allocation
taled $5,000 ($1,500 + $1,500 + $2,000) and are includi- of other deductions among the items of distributable net
ble in the incomes of Reese, Joe, and Alex to the extent of income. In allocating items of income and deductions to
$3,500 (distributable net income of $6,000 minus currently beneficiaries to whom income must be distributed cur-
distributable income to Reese of $2,500). Reese will in- rently, the charitable contribution deduction isn't taken into
clude an additional $1,400 [($2,000 ÷ $5,000) × $3,500] in account to the extent that it exceeds income for the year
gross income. Joe and Alex each will include $1,050 reduced by currently distributable income.
[($1,500 ÷ $5,000) × $3,500] in their gross incomes.
Example. The will of H. Thomas requires a current dis-
Discharge of a Legal Obligation tribution from income of $3,000 a year to H. Thomas’s
spouse, Kai, during the administration of the estate. The
If an estate, under the terms of a will, discharges a legal will also provides that the personal representative, using
obligation of a beneficiary, the discharge is included in that discretion, may distribute the balance of the current earn-
beneficiary's income as either currently distributable in- ings either to H. Thomas's child, Avery, or to one or more
come or other amount paid. This doesn't apply to the dis- designated charities. Last year, the estate's income con-
charge of a beneficiary's obligation to pay alimony or sep- sisted of $4,000 of taxable interest and $1,000 of tax-ex-
arate maintenance. empt interest. There were no deductible expenses. The
personal representative distributed the $3,000 to Kai,

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made a contribution of $2,500 to the local heart associa- Other income from the estate is reported on the benefi-
tion, and paid $1,500 to Avery. ciary’s return for the year in which it was received. If the
The distributable net income for determining the char- beneficiary's tax year is different from the estate's tax year,
acter of the distribution to Kai is $3,000. The charitable see Different tax years next.
contribution deduction to be taken into account for this
Different tax years. Each beneficiary must include
computation is $2,000 (the estate's income ($5,000) mi-
their share of the estate income in the beneficiary’s return
nus the currently distributable income ($3,000)). The
for the tax year in which the last day of the estate's tax
$2,000 charitable contribution deduction must be alloca-
year falls. If the tax year of the estate is a fiscal year end-
ted: $1,600 [($4,000 ÷ $5,000) × $2,000] to taxable inter-
ing on June 30, 2023, and the beneficiary's tax year is the
est and $400 [($1,000 ÷ $5,000) × $2,000] to tax-exempt
calendar year, the beneficiary will include in gross income
interest. Kai is considered to have received $2,400
for the tax year ending December 31, 2023, their share of
($4,000 − $1,600) of taxable interest and $600 ($1,000 −
the estate's distributable net income distributed or re-
$400) of tax-exempt interest. Kai must include the $2,400
quired to be distributed during the fiscal year ending the
in gross income and must report the $600 of tax-exempt
previous June 30.
interest, but it isn't taxable.
To determine the amount to be included in Avery's Death of individual beneficiary. If an individual ben-
gross income, however, take into account the entire chari- eficiary dies, the beneficiary's share of the estate's distrib-
table contribution deduction. The currently distributable in- utable net income may be distributed or be considered
come is greater than the estate's income after taking into distributed by the estate for its tax year that doesn't end
account the charitable contribution deduction, so none of with or within the last tax year of the beneficiary. In this
the amount paid to Avery must be included in Avery’s case, the estate income that must be included in the gross
gross income for the year. income on the beneficiary's final return is based on the
amounts distributed or considered distributed during the
How and When To Report tax year of the estate in which the beneficiary’s last tax
year ended. However, for a cash basis beneficiary, the
How income from the estate is reported depends on the gross income of the last tax year includes only the
character of the income in the hands of the estate. When amounts actually distributed before death. Income that
the income is reported depends on whether it represents must be distributed to the beneficiary but, in fact, is distrib-
amounts credited or required to be distributed to benefi- uted to the beneficiary's estate after death is included in
ciaries or other amounts. the gross income of the beneficiary's estate as income in
respect of a decedent.
How to report estate income. Each item of income
keeps the same character in the hands of a beneficiary as Termination of nonindividual beneficiary. If a bene-
it had in the hands of the estate. If the items of income dis- ficiary that isn't an individual, for example, a trust or a cor-
tributed or considered to be distributed include dividends, poration, ceases to exist, the amount included in its gross
tax-exempt interest, or capital gains, they will keep the income for its last tax year is determined as if the benefi-
same character in the beneficiary's hands for purposes of ciary were a deceased individual. However, income that
the tax treatment given those items. Generally, a benefi- must be distributed before termination, but which is ac-
ciary reports dividends on Form 1040 or 1040-SR, line 3b, tually distributed to the beneficiary's successor in interest,
and capital gains on Schedule D (Form 1040). The tax-ex- is included in the gross income of the nonindividual bene-
empt interest, while not included in taxable income, must ficiary for its last tax year.
be shown on Form 1040 or 1040-SR, line 2a. Report busi-
Schedule K-1 (Form 1041). The personal representa-
ness and other nonpassive income in Part III of Sched-
tive of the estate must provide the beneficiary with a copy
ule E (Form 1040), Supplemental Income and Loss.
of Schedule K-1 (Form 1041) or a substitute Sched-
The estate's personal representative must provide the
ule K-1. The beneficiary shouldn't file Schedule K-1 (Form
beneficiary with the classification of the various items that
1041) with the beneficiary’s Form 1040 or 1040-SR, but
make up the beneficiary’s share of the estate income and
should keep it for their personal records.
the credits the beneficiary takes into consideration to
Each beneficiary (or nominee of a beneficiary) who re-
properly prepare the beneficiary’s individual income tax
ceives a distribution from the estate for the tax year or to
return. See Schedule K-1 (Form 1041), later.
whom any item is allocated must receive a Schedule K-1
When to report estate income. If income from the es- (Form 1041) or substitute. The personal representative
tate is credited or must be distributed to a beneficiary for a must furnish the form to each beneficiary or nominee by
tax year, the beneficiary reports that income (even if not the date on which the Form 1041 is filed.
distributed) on the return for that year. The personal repre- Nominees. A person who holds an interest in an es-
sentative can elect to treat distributions paid or credited tate as a nominee for a beneficiary must provide the es-
within 65 days after the close of the estate's tax year as tate with the name and address of the beneficiary, and any
having been paid or credited on the last day of that tax other required information. The nominee must provide the
year. If this election is made, the beneficiary must report beneficiary with the information received from the estate.
that distribution on the beneficiary’s return for that year.
Penalty. A personal representative (or nominee) who
fails to provide the correct information may be subject to a

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$310 penalty for each failure. If it is shown that such failure net income). The fact that the bequest will be specific
is due to intentional disregard of the filing requirement, the sometime before distribution is immaterial. It isn't ascer-
penalty amount increases. tainable by the terms of the will as of the date of death.

Consistent treatment of items. Beneficiaries must Distributions not treated as bequests. The following
treat estate items the same way on their individual returns distributions aren't bequests that meet all the require-
as those items are treated on the estate's income tax re- ments listed earlier that allow a distribution to be excluded
turn. If their treatment is different from the estate's treat- from the beneficiary's income and don't allow it as a de-
ment, the beneficiary must file Form 8082, Notice of In- duction to the estate.
consistent Treatment or Administrative Adjustment
Request (AAR), with the beneficiary’s return to identify the Paid only from income. An amount that can be paid
difference. If the beneficiary doesn't file Form 8082 and only from current or prior income of the estate doesn't
the estate has filed a return, the IRS can immediately as- qualify even if it is specific in amount and there is no provi-
sess and collect any tax and penalties that result from ad- sion for installment payments.
justing the item to make it consistent with the estate's Annuity. An annuity or a payment of money or of spe-
treatment. cific property in lieu of, or having the effect of, an annuity
isn't the payment of specific property or a sum of money.
Bequest
Residuary estate. If the will provides for the payment
of the balance or residue of the estate to a beneficiary of
A bequest is the act of giving or leaving property to an-
the estate after all expenses and other specific legacies or
other through the last will and testament. Generally, any
bequests, that residuary bequest isn't a payment of spe-
distribution of income (or property in kind) to a beneficiary
cific property or a sum of money.
is an allowable deduction to the estate and is includible in
the beneficiary's gross income to the extent of the estate's Gifts made in installments. Even if the gift or be-
distributable net income. However, a distribution won't be quest is made in a lump sum or in three or fewer install-
an allowable deduction to the estate and won't be includi- ments, it won't qualify as specific property or a sum of
ble in the beneficiary's gross income if the distribution money if the will provides that the amount must be paid in
meets all the following requirements. more than three installments.

• It is required by the terms of the will. Conditional bequests. A bequest of specific property or
• It is a gift or bequest of a specific sum of money or a sum of money that may otherwise be excluded from the
property. beneficiary's gross income won't lose the exclusion solely
because the payment is subject to a condition.
• It is paid out in three or fewer installments under the
terms of the will. Installment payments. Certain rules apply in determin-
ing whether a bequest of specific property or a sum of
Specific sum of money or property. To meet this test,
money has to be paid or credited to a beneficiary in more
the amount of money or the identity of the specific prop-
than three installments.
erty must be determinable under the decedent's will as of
the date of death. To qualify as specific property, the prop- Personal items. Don't take into account bequests of
erty must be identifiable both as to its kind and its amount. articles for personal use, such as personal and household
effects and automobiles.
Example 1. D. Rogers' will provided that D. Rogers’
child, Taylor, receive D. Rogers’ interest in the Rog- Real property. Don't take into account specifically
ers-Jones partnership. D. Rogers’ other child, Angel, designated real property, the title to which passes under
would receive a sum of money equal to the value of the local law directly to the beneficiary.
partnership interest given to Taylor. The bequest to Taylor Other property. All other bequests under the dece-
is a gift of a specific property ascertainable at the date of dent's will for which no time of payment or crediting is
D. Rogers' death. The bequest of a specific sum of money specified and that are to be paid or credited in the ordinary
to Angel is determinable on the same date. course of administration of the estate are considered as
required to be paid or credited in a single installment.
Example 2. M. Jenkins' will provided that the surviving
Also, all bequests payable at any one specified time under
spouse, Riley, would receive money or property to be se-
the terms of the will are treated as a single installment.
lected by the personal representative equal in value to half
of M. Jenkins’ adjusted gross estate. The identity of the Testamentary trust. In determining the number of in-
property and the money in the bequest are dependent on stallments that must be paid or credited to a beneficiary,
the personal representative's discretion and the payment the decedent's estate and a testamentary trust created by
of administration expenses and other charges, which the decedent's will are treated as separate entities.
aren't determinable at the date of M. Jenkins’ death. As a Amounts paid or credited by the estate and by the trust
result, the provision isn't a bequest of a specific sum of are counted separately.
money or of specific property, and any distribution under
that provision is a deduction for the estate and income to
the beneficiary (to the extent of the estate's distributable

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Termination of Estate loss can be carried to more than 1 tax year, the estate's
last tax year (whether or not a short tax year) and the ben-
The termination of an estate is generally marked by the eficiary's first tax year to which the loss is carried each
end of the period of administration and by the distribution constitute a tax year for figuring the number of years to
of the assets to the beneficiaries under the terms of the which a loss may be carried. A capital loss carryover from
will or under the laws of succession of the state if there is an estate to a corporate beneficiary will be treated as
no will. These beneficiaries may or may not be the same though it resulted from a loss incurred in the estate's last
persons as the beneficiaries of the estate's income. tax year (whether or not a short tax year), regardless of
when the estate actually incurred the loss.
Period of Administration If the last tax year of the estate is the last tax year to
which an NOL may be carried, see No double deductions,
The period of administration is the time actually required later. For a general discussion of NOLs, see Pub. 536. For
by the personal representative to assemble all the dece- a discussion of capital losses and capital loss carryovers,
dent's assets, pay all the expenses and obligations, and see Pub. 550.
distribute the assets to the beneficiaries. This may be lon-
Excess deductions. If the deductions in the estate's last
ger or shorter than the time provided by local law for the
tax year (other than the exemption deduction or the chari-
administration of estates.
table contributions deduction) are more than gross in-
Ends if all assets distributed. If all assets are distrib- come for that year, the beneficiaries succeeding to the es-
uted except a reasonable amount set aside, in good faith, tate's property can claim the excess as a deduction in
for the payment of unascertained or contingent liabilities figuring taxable income. To establish these deductions for
and expenses (but not including a claim by a beneficiary, the beneficiaries, a return must be filed for the estate
as a beneficiary), the estate will be considered terminated. along with a schedule showing the computation of each
kind of deduction and the allocation of each to the benefi-
Ends if period unreasonably long. If settlement is pro- ciaries.
longed unreasonably, the estate will be treated as termina- Under Final Regulations - TD9918, each excess deduc-
ted for federal income tax purposes. From that point on, tion on termination of an estate or trust retains its separate
the income, deductions, and credits of the estate are con- character as an amount allowed in arriving at AGI, a
sidered those of the person or persons succeeding to the non-miscellaneous itemized deduction, or a miscellane-
property of the estate. ous itemized deduction. For more information, see the In-
structions for Form 1041.
Transfer of Unused Deductions to No double deductions. An NOL deduction allowable
Beneficiaries to a successor beneficiary can't be considered in figuring
the excess deductions on termination. However, if the es-
If the estate has unused loss carryovers or excess deduc- tate's last tax year is the last year in which a deduction for
tions for its last tax year, they are allowed to those benefi- an NOL can be taken, the deduction, to the extent not ab-
ciaries who succeed to the estate's property. See Succes- sorbed in the last return of the estate, is treated as an ex-
sor beneficiary, later. cess deduction on termination. Any item of income or de-
duction, or any part thereof, taken into account in figuring
Note. See Notice 2018-61 and Regulations section
an NOL or a capital loss carryover of the estate for its last
1.67-4 for more information about allowable beneficiary
tax year can't be used again to figure the excess deduc-
deductions.
tion on termination.
Unused loss carryovers. An unused NOL carryover or
Successor beneficiary. A beneficiary entitled to an un-
capital loss carryover existing upon termination of the es-
used loss carryover or an excess deduction is the benefi-
tate is allowed to the beneficiaries succeeding to the prop-
ciary who, upon the estate's termination, bears the burden
erty of the estate. That is, these deductions will be
of any loss for which a carryover is allowed or of any de-
claimed on the beneficiary's tax return. This treatment oc-
ductions more than gross income.
curs only if a carryover would have been allowed to the es-
tate in a later tax year if the estate had not been termina- If decedent had no will. If the decedent had no will,
ted. the beneficiaries are those heirs or next of kin to whom the
Both types of carryovers generally keep their same estate is distributed. If the estate is insolvent, the benefi-
character for the beneficiary as they had for the estate. ciaries are those to whom the estate would have been dis-
However, if the beneficiary of a capital loss carryover is a tributed had it not been insolvent. If the decedent's spouse
corporation, the corporation will treat the carryover as a is entitled to a specified dollar amount of property before
short-term capital loss regardless of its status in the es- any distributions to other heirs and the estate is less than
tate. The NOL carryover and the capital loss carryover are that amount, the spouse is the beneficiary to the extent of
used in figuring the beneficiary's AGI and taxable income. the deficiency.
The beneficiary may have to adjust any NOL carryover in
If decedent had a will. If the decedent had a will, a
figuring the AMT.
beneficiary normally means the residuary beneficiaries
The first tax year to which the loss is carried is the ben-
(including residuary trusts). Those beneficiaries who
eficiary's tax year in which the estate terminates. If the

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receive specific property or a specific amount of money Filing Form 1041-T with Form 1041 doesn't
aren’t ordinarily considered residuary beneficiaries, except ! change the due date for filing Form 1041-T. The
to the extent the specific amount isn't paid in full. CAUTION IRS will reject a late-filed election. If Form 1041-T
Also, a beneficiary who isn't strictly a residuary benefi- is rejected and Form 1041 was filed based on a success-
ciary, but whose devise or bequest is determined by the ful election, then the personal representative must file an
value of the estate as reduced by the loss or deduction, is amended Form 1041, including amended Schedule(s)
entitled to the carryover or the deduction. This includes K-1.
the following beneficiaries.
• A beneficiary of a fraction of the decedent's net estate The estimated tax allocated to each beneficiary is trea-
after payment of debts, expenses, and specific be- ted as paid or credited to the beneficiary on the last day of
quests. the estate's final tax year and must be reported in box 13
of Schedule K-1 (Form 1041), using code A. If the estate
• A nonresiduary beneficiary, when the estate is unable terminated in 2023, this amount is treated as a payment of
to satisfy the bequest in full. 2023 estimated tax made by the beneficiary on January
• A surviving spouse receiving a fractional share of the 15, 2024.
estate in fee under a statutory right of election when
the losses or deductions are taken into account in de-
termining the share. However, such a beneficiary Estate and Gift Taxes
doesn't include a recipient of a dower or curtesy, or a
beneficiary who receives any income from the estate This publication doesn't contain all the rules and
from which the loss or excess deduction is carried ! exceptions for federal estate, gift, or genera-
over. CAUTION tion-skipping transfer (GST) taxes, nor does it
contain all the rules that apply to nonresident noncitizens.
Allocation among beneficiaries. The total of the un- If you need more information, see Form 709; Form 706;
used loss carryovers or the excess deductions on termina- Form 706-NA, United States Estate (and Generation-Skip-
tion that may be deducted by the successor beneficiaries ping Transfer) Tax Return, Estate of nonresident not a citi-
is to be divided according to the share of each in the bur- zen of the United States; and the related instructions. This
den of the loss or deduction. publication also doesn't contain any information about
state or local taxes. That information should be available
Example. Under the parent’s will, Ash is to receive from your state and local taxing authority.
$20,000. The remainder of the estate is to be divided
equally between Ash’s siblings, Danny and Robin. After all
expenses are paid, the estate has sufficient funds to pay The discussion below is to give you a general under-
Ash only $15,000, with nothing to Danny and Robin. In the standing of when estate, gift, and GST taxes apply and
estate's last tax year, there are excess deductions of when they don't. It explains how much money or property
$5,000 and $10,000 of unused loss carryovers. The total can be given away during life or left to heirs at death be-
of the excess deductions and unused loss carryovers is fore any tax will be owed. If the decedent gave someone
$15,000 and Ash is considered a successor beneficiary to money or property during the decedent’s life, the personal
the extent of $5,000, so Ash is entitled to one-third of the representative may have to pay the federal gift tax on be-
unused loss carryover and one-third of the excess deduc- half of the decedent if it wasn't previously paid. The money
tions. Ash’s siblings may divide the other two-thirds of the and property owned by the decedent at death is the estate
excess deductions and the unused loss carryovers be- and may be subject to federal estate tax. This is in addi-
tween them. tion to any federal income tax that is owed on the gross in-
come of the estate.
Transfer of Credit for Estimated Tax Most gifts aren't subject to the gift tax and most estates
Payments aren't subject to the estate tax. For example, there is usu-
ally no tax if a gift is given to a spouse or charity or if the
When an estate terminates, the personal representative estate goes to the decedent’s spouse or charity at death.
can elect to transfer to the beneficiaries the credit for all or If gifts are made to someone else, the gift tax usually
part of the estate's estimated tax payments for the last tax doesn't apply until the value exceeds the annual exclusion
year. To make this election, the personal representative for the year. See Annual exclusion under Gift Tax, later.
must complete Form 1041-T, Allocation of Estimated Tax Even if the gift or estate tax applies, it may be eliminated
Payments to Beneficiaries, and file it either separately or by the applicable credit amount, discussed later.
with the estate's final Form 1041. The Form 1041-T must
be filed by the 65th day after the close of the estate's tax Person receiving the gift or bequest. Generally, the
year. person who receives a gift or bequest of property from an
estate won't have to pay any federal gift tax or estate tax.
Also, that person won't have to pay income tax on the
value of the gift or inheritance received.

Note. Gifts or bequests received from covered expatri-
ates after June 16, 2008, may be subject to a tax which

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must be paid by the recipient. Consult a qualified tax pro- Basic exclusion amount. The basic exclusion amount
fessional for more information. for decedents who died in 2023 is $12,920,000.
Beginning in 2011, a predeceased spouse's unused
No income tax deduction. Making a gift or leaving prop- exclusion, the DSUE amount, may be added to the basic
erty from an estate to heirs doesn't ordinarily affect federal exclusion amount to determine the applicable exclusion
income tax liability. The value of gifts made (other than amount. The DSUE amount is only available if an election
gifts that are charitable contributions) or any federal gift is made on the Form 706 filed by the predeceased spou-
tax resulting from making those gifts can't be deducted se’s estate.
from income tax liability. The value of any bequests made The total of the basic exclusion amount and any DSUE
or estate tax resulting from making bequests is also not amount received from the estate of a predeceased
deductible from income tax liability. spouse is the applicable exclusion amount. This amount
may be applied against tax due on lifetime gifts and/or
Filing requirements. For estate tax purposes, the per-
transfers at death.
sonal representative may be required to file Form 706. If
death occurred in 2023, Form 706 must be filed if the Applicable credit amount. A credit is an amount that re-
gross estate of the decedent, plus any adjusted taxable duces or eliminates tax. The applicable credit applies to
gifts and specific gift tax exemption, is valued at more than both the gift tax and the estate tax and it equals the tax on
$12,920,000. Form 706 must also be timely filed if the es- the applicable exclusion amount. The applicable credit
tate elects to transfer any DSUE to a surviving spouse must be subtracted from any gift or estate tax owed. Any
(this is also known as the portability election), regardless applicable credit used against gift tax in 1 year reduces
of the size of the gross estate. the amount of credit that can be used against gift or estate
If Form 706 is required, the return and payment of any taxes in a later year.
tax is due within 9 months after the date of the decedent’s In 2023, the credit on the basic exclusion amount is
death. To apply for an extension of time to file the return $5,113,800 (exempting $12,920,000 from tax). The total
and/or pay the tax due, use Form 4768, Application for Ex- amount of applicable credit available to a person will equal
tension of Time To File a Return and/or Pay U.S. Estate the tax on the basic exclusion amount plus the tax on any
(and Generation-Skipping Transfer) Taxes, to apply for an DSUE amount.
automatic 6-month extension of time to file. For examples of how the credit works, see Applying the
An executor can only elect to transfer the DSUE applicable credit to gift tax and Applying the applicable
amount to the surviving spouse if the Form 706 is filed credit to estate tax, later.
timely; that is, within 9 months of the decedent's date of
death or, if you have received an extension of time to file, Restored exclusion and GST exemption amounts. If
before the 6-month extension period ends. a decedent made a taxable gift during the decedent's life-
time to the decedent's same-sex spouse and that transfer
Note. Executors who did not have a filing requirement resulted in a reduction of the decedent's available applica-
under section 6018(a) but failed to timely file Form 706 to ble exclusion amount, there is a new procedure allowing
make the portability election may be eligible for an exten- the decedent to restore the exclusion that was utilized in
sion under Rev. Proc. 2022-32, 2022-30 I.R.B. 101 (super- the transfer. If a decedent made a taxable gift during the
seding Rev. Proc. 2017-34, 2017-26 I.R.B. 1282). Execu- decedent's lifetime to a skip person whose generation as-
tors filing to elect portability may now file Form 706 on or signment is changed as a result of Notice 2017-15, any
before the fifth anniversary of the decedent's death. GST exemption amount allocated to the gift will be
The federal gift tax return, Form 709, is filed for every deemed void. For more information, see the Instructions
year in which a gift is made. However, a gift tax return isn’t for Form 706 and Notice 2017-15, 2017-06 I.R.B. 783.
generally required unless money or property worth more
than the annual exclusion for that year is given to some-
one other than the decedent’s spouse or the gift given isn't Gift Tax
subject to the annual exclusion. The annual gift exclusion
The gift tax applies to lifetime transfers of property from
is $17,000 for 2023. See Annual exclusion, later, for more
one person (the donor) to another person (the donee). A
information.
gift is made if tangible or intangible property (including
Generally, you must file Form 709 by April 15 of the
money), the use of property, or the right to receive income
year after the gift was made. An extension of time to file
from property is given without expecting to receive some-
the return is available by filing Form 8892, Application for
thing of at least equal value in return. If something is sold
Automatic Extension of Time To File Form 709 and Form
for less than its full value or if a loan is made without inter-
709-NA and/or Payment of Gift/Generation-Skipping
est or with reduced (less than market rate) interest, a gift
Transfer Tax.
may have been made.
Note. Any extension of time granted for filing an indi- The general rule is that any gift is a taxable gift. How-
vidual tax return will also automatically extend the time to ever, there are many exceptions to this rule.
file your gift tax return. An income tax return extension is
made on Form 4868, Application for Automatic Extension Generally, the following gifts aren't taxable gifts.
of Time To File U.S. Individual Income Tax Return.
• Gifts, excluding gifts of future interests, that aren't
more than the annual exclusion for the calendar year.

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• Tuition or medical expenses paid directly to an educa- Gift splitting. If the decedent or the decedent’s spouse
tional or medical institution for someone else. made a gift to a third party, the gift can be considered as
made one-half by the decedent and one-half by the dece-
• Gifts to your spouse, if your spouse is a U. S. citizen.
dent’s spouse. This is known as gift splitting. Both spou-
• Gifts to a political organization for its use. ses must be U. S. citizens or residents, must agree to split
• Gifts to certain exempt organizations described in sec- the gift, and, in the case of a deceased spouse, the per-
tion 501(c)(4), 501(c)(5), and 501(c)(6). sonal representative will act on behalf of the decedent. If
there is consent to split the gift, both spouses can apply
• Gifts to charities. the annual exclusion to one-half of the gift. For gifts made
in 2023, gift splitting allows married couples to give up to
Annual exclusion. A separate annual exclusion applies
$34,000 to a person without making a taxable gift. If a gift
to each person to whom a gift is made. The gift tax annual
is split, both spouses must file a gift tax return to show an
exclusion is subject to cost-of-living increases.
agreement to use gift splitting. Form 709 must be filed
even if half of the split gift is less than the annual exclu-
Gift Tax Annual Exclusion sion.
Year(s) Annual Exclusion Example. Jaden and Jaden’s spouse, Sammy, agreed
to split the gifts that they made during 2023. Jaden’s sib-
2002 – 2005 $11,000 ling’s child, Morgan, received $21,000 from Jaden. Sam-
2006 – 2008 $12,000 my’s sibling’s child, Jo, received $18,000 from Sammy. Al-
2009 – 2012 $13,000 though each gift is more than the annual exclusion
($17,000), by gift splitting, they made these gifts without
2013 – 2017 $14,000
making a taxable gift. Jaden’s gift to Morgan is treated as
2018 – 2021 $15,000 one-half ($10,500) from Jaden and one-half ($10,500)
2022 $16,000 from Sammy. Sammy’s gift to Jo is also treated as one-half
2023 $17,000 ($9,000) from Sammy and one-half ($9,000) from Jaden.
In each case, because one-half of the split gift isn't more
In 2023, generally, gifts valued up to $17,000 per per- than the annual exclusion, it isn't a taxable gift. However,
son could have been given to any number of people, and each of them must file a gift tax return.
none of the gifts will be taxable. If the decedent's spouse
is not a U. S. citizen, the annual exclusion for gifts made to Applying the applicable credit to gift tax. After you
the decedent’s spouse in 2023 is $175,000. However, gifts determine which gifts are taxable, figure the amount of gift
of future interests can't be excluded under the annual ex- tax on the total taxable gifts and apply the applicable
clusion. A gift of a future interest is a gift that is limited so credit for the year.
that its use, possession, or enjoyment will begin at some Example. In 2023, the decedent gave the following
point in the future. If the decedent was married, both the gifts and amounts to the following people.
decedent and spouse could have separately given gifts
valued up to $17,000 to the same person without making • Morgan, a relative, a cash gift of $8,000. It is the dece-
dent’s only gift to Morgan this year.
a taxable gift. If one spouse gave a gift valued at more
than the $17,000 exclusion, see Gift splitting, later. • Danny, a friend, the decedent paid the $17,000 col-
lege tuition.
Example 1. The decedent gave Madison, a relative, a
cash gift of $8,000. It is the decedent’s only gift to Madi- • Avery, 25-year-old child, $27,000.
son in 2023. The gift isn't a taxable gift because it isn't • Kai, 27-year-old child, $27,000.
more than the $17,000 annual exclusion.
The decedent never gave a taxable gift before and
Example 2. The decedent paid the $17,000 college doesn't have any DSUE. Apply the exceptions to the gift
tuition of a friend directly to the friend’s college. Because tax and the applicable credit as follows.
the payment qualifies for the educational exclusion, the
gift isn't a taxable gift. 1. Apply the educational exclusion. Payment of tuition
expenses isn't subject to the gift tax. Therefore, the
Example 3. The decedent gave $27,000 to the dece- gift to Danny isn't a taxable gift.
dent’s 25-year-old child. The first $17,000 of the gift isn't
subject to the gift tax because of the annual exclusion. 2. Apply the annual exclusion. The first $17,000 given
The remaining $10,000 is a taxable gift. As explained later isn't a taxable gift. Therefore, the $8,000 gift to Mor-
under Applying the applicable credit to gift tax, the estate gan, the first $17,000 of the gift to Avery, and the first
may not have to pay the gift tax on the remaining $10,000. $17,000 of the gift to Kai aren't taxable gifts.
However, a gift tax return must be filed. 3. Apply the applicable credit. The gift tax on $20,000
($10,000 remaining from the gift to Avery plus
More information. See Form 709 and its instructions for $10,000 remaining from the gift to Kai) is $3,800. Sub-
more information about taxable gifts. tract the $3,800 from the applicable credit of
$5,113,800 for 2023. The applicable credit that can

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be used against the gift or estate tax in a later year is • The marital deduction (generally, the value of the
$5,110,000. property that passes from the estate to the surviving
spouse),
As the personal representative of the decedent's es-
tate, you don't have to pay any gift tax for 2023. However, • The charitable deduction (generally, the value of the
you do have to file Form 709. property that passes from the decedent's estate to the
For more information, see the Table for Computing Gift United States, any state, a political subdivision of a
Tax in the Instructions for Form 709. state, the District of Columbia, or a qualifying charity
for exclusively charitable purposes), and
Filing a gift tax return. Generally, a gift tax return must
be filed if any of the following apply. • The state death tax deduction (generally, any estate,
inheritance, legacy, or succession taxes paid as the
• Gifts were given to at least one person (other than the result of the decedent’s death to any state or the Dis-
decedent’s spouse) that are more than the annual ex- trict of Columbia).
clusion for the year.
More information. For more information on what is inclu-
• The decedent and the decedent’s spouse split a gift.
ded in the gross estate and the allowable deductions, see
• The decedent gave someone (other than decedent’s Form 706 and Form 706-NA and their instructions.
spouse) a gift of a future interest that the recipient
can't actually possess, enjoy, or receive income from Applying the applicable credit to estate tax. Basically,
until some time in the future. any applicable credit not used to eliminate gift tax can be
used to eliminate or reduce estate tax. However, to deter-
• The decedent gave the decedent’s spouse an interest
mine the applicable credit available for use against the es-
in property that will be ended by some future event.
tate tax, you must complete Form 706.
A gift tax return doesn't have to be filed to report gifts to
(or for the use of) political organizations or gifts made by Filing an estate tax return. An estate tax return must be
paying someone’s tuition or medical expenses. filed if the gross estate, plus any adjusted taxable gifts and
The following deductible gifts made to charities also specific gift tax exemption, is more than the basic exclu-
don't need to be reported. sion amount. The basic exclusion amount is generally
equal to the filing requirement. For 2023, the basic exclu-
• An entire interest in property, if no other interest has
sion amount is $12,920,000.
been transferred for less than adequate consideration
or for other than a charitable use. Note. The federal estate tax return doesn’t generally
• A qualified conservation contribution that is a perpet- need to be filed unless the total value of lifetime transfers
ual restriction on the use of real property. and the estate is worth more than the basic exclusion
amount for the year of death. However, a complete and
More information. If you think you need to file a gift tax timely filed return is required if a deceased spouse’s es-
return, see Form 709 and its instructions for more informa- tate elects portability of any unused exclusion amount for
tion. You can get publications and forms at IRS.gov/ use by the surviving spouse.
Forms. You may want to speak with a qualified tax profes- Adjusted taxable gifts is the total of the taxable gifts
sional to receive help with gift tax questions. made by the decedent after 1976 that aren't included in
the gross estate.
Estate Tax
Note. The specific gift tax exemption applies only to
Estate tax may apply to the decedent's taxable estate at gifts made after September 8, 1976, and before January
death. The taxable estate is the gross estate less allowa- 1, 1977.
ble deductions. The applicable exclusion amount is the total amount ex-
empted from gift and/or estate tax. For estates of dece-
Gross estate. The gross estate includes the value of all
dents dying after December 31, 2010, the applicable ex-
property the decedent owns partially or in full at the time of
clusion amount equals the basic exclusion amount plus
death. Your gross estate also includes the following.
any DSUE amount. The DSUE amount is the remaining
• Life insurance proceeds payable to the estate or, if the applicable exclusion amount from the estate of a prede-
decedent owned the policy, to the decedent’s heirs. ceased spouse who died after December 31, 2010. The
• The value of certain annuities payable to the estate or DSUE amount is only available where an election was
the decedent’s heirs. made on the Form 706 filed by the deceased spouse’s es-
tate.
• The value of certain property the decedent transferred
within 3 years before death. Filing requirement. The following table lists the filing re-
quirements for estates of decedents dying after 2011.
Taxable estate. The allowable deductions used in deter-
mining the taxable estate include:
• Funeral expenses paid out of the estate,
• Debts the decedent owed at the time of death,

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Basic Exclusion Amount                                              determine the beneficiary’s basis in that property. Calcu-
                                                                    late  a  basis  consistent  with  the  final  estate  tax  value  by 
Year of Death                  File return if estate’s value is     starting with the reported value and then making any al-
                                              more than:            lowed adjustments.
2011                                          $5,000,000               For  more  information,  see  sections  1014(f)  and  6035, 
2012                                          $5,120,000            the Instructions for Form 8971 and Schedule A, and   Col-
2013                                          $5,250,000            umn (e)—Cost or Other Basis in the Instructions for Form 
                                                                    8949.  Also,  see  the  2023  Instructions  for  Schedule  D 
2014                                          $5,340,000            (Form 1041).
2015                                          $5,430,000
2016                                          $5,450,000            Generation-Skipping Transfer Tax
2017                                          $5,490,000
                                                                    The generation-skipping transfer (GST) tax may apply to 
2018                                          $11,180,000           gifts during the decedent's life or transfers occurring at the 
2019                                          $11,400,000           decedent's death, called bequests, made to skip persons. 
2020                                          $11,580,000           A  skip  person  is  a  person  who  belongs  to  a  generation 
                                                                    that  is  two  or  more  generations  below  the  generation  of 
2021                                          $11,700,000
                                                                    the  donor.  For  instance,  the  decedent's  grandchild  will 
2022                                          $12,060,000           generally be a skip person to the decedent and the dece-
2023*                                         $12,920,000           dent’s spouse. The GST tax is figured on the amount of 
* See IRS.gov for inflation adjusted amount.                        the gift or bequest transferred to a skip person, after sub-
                                                                    tracting  any  GST  exemption  allocated  to  the  gift  or  be-
                                                                    quest at the maximum gift and estate tax rates. Each indi-
More information.  If you think the decedent will have an 
                                                                    vidual has a GST exemption equal to the basic exclusion 
estate on which tax must be paid, or if the estate will have 
                                                                    amount, as indexed for inflation, for the year the gift or be-
to file an estate tax return even if no tax will be due, see 
                                                                    quest was made. GSTs have three forms: direct skip, taxa-
Form  706,  Form  706-NA,  and  the  forms’  instructions  for 
                                                                    ble distribution, and taxable termination.
more  information.  You  can  get  publications  and  forms  at 
IRS.gov/Forms. The estate’s personal representative may             •   A direct skip is a transfer made during the decedent's 
want to speak with a qualified tax professional to receive              life or occurring at death that is:
help with estate tax questions.
                                                                        1. Subject to the gift or estate tax,
Consistent Basis Reporting                                              2. Of an interest in property, and
Requirement                                                             3. Made to a skip person.
                                                                    •   A taxable distribution is any distribution from a trust to 
Certain  executors  are  required  to  report  the  estate  tax         a skip person that isn't a direct skip or a taxable termi-
value of property passing from a decedent to the IRS and                nation.
to the recipient of the property (beneficiary). The purpose 
of the requirement is to ensure that the appropriate value          •   A taxable termination is the end of a trust’s interest in 
(or basis) is used to calculate the tax due from the sale or            property where the property interest will be transferred 
disposal of property received from an estate.                           to a skip person.

An executor of an estate (or other person) required to              More information.    If you think the decedent has made a 
file an estate tax return after July 31, 2015, must provide a       gift or bequest on which GST tax must be paid, see Form 
Form 8971 with attached Schedules A to the IRS, and a               709, Form 706, Form 706-NA, and the forms’ instructions 
copy of the beneficiary's Schedule A to each beneficiary            for more information. You can get publications and forms 
who receives or is to receive property from the estate. The         at IRS.gov/Forms.  The  estate’s  personal  representative 
Schedule  A  must  show  the  final  estate  tax  value  of  the    may want to speak with a qualified tax professional to re-
property received or to be received by the beneficiary. An          ceive help with GST questions.
executor (or other person) who files an estate tax return 
only to make an election regarding the GST tax or portabil-
ity of the DSUE is not required to provide Form 8971 and            Example
Schedule  A.  The  executor  is  required  to  file  Form  8971 
and all Schedules A with the IRS and provide the benefi-            The following is an example of a typical situation.
ciary with their Schedule A within 30 days of the earlier of 
the due date (including extensions) or filing of Form 706.             On April 9, 2023, your father, Jo Smith, died at the age 
                                                                    of 72. Your father had not resided in a community property 
If Form 8971, Schedule A, Part 2, column C, received                state  and  the  will  named  you  to  serve  as  executor  (per-
by  the  beneficiary  indicates  that  the  property  increases     sonal representative). Except for specific bequests to your 
the  estate  tax  liability,  the  beneficiary  must  use  a  basis mother, Angel, of your parents' home and your father's au-
consistent with the final estate tax value of the property to       tomobile,  and  a  bequest  of  $5,000  to  the  church  your 

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father attended, your father's will named your mother and Your mother also gave you a Form W-2 that your fa-
brother, Jamie, as beneficiaries. ther's employer had sent. In examining it, you discover
After the court has approved your appointment as the that your father had been paid $20,000 in salary between
executor, you should obtain an EIN for the estate. (See January 1, 2023, and April 9, 2023 (the date of death).
Duties under Personal Representatives, earlier.) Next, you The Form W-2 showed wages of $20,000 in box 1 and
use Form 56 to notify the IRS that you have been appoin- $845 as federal income tax withheld in box 2. The Form
ted executor of your father's estate. W-2 also indicated social security and Medicare wages of
$20,000 in boxes 3 and 5. The estate received a Form
Assets of the estate. Your father had the following as- 1099-MISC from the employer showing $12,000 in box 3.
sets when your father died. The estate received a Form 1099-INT showing your father
was paid $1,900 interest on the savings account at the
• Checking account balance was $2,550 and savings First S&L of Juneville in 2023, before the date of death.
account balance was $53,650.
• Your father inherited the home from your grandparents Final Return for Decedent—Form
on March 5, 1980. At that time, it was worth $100,000,
but was appraised at the time of your father's death at 1040 or 1040-SR

$500,000. The home was free of existing debts (or From the papers in your father's files, you determine that
mortgages) at the time of your father’s death. the $20,000 paid to your father by the employer (as shown
• Your father owned 500 shares of ABC Company stock in box 1 of the Form W-2), rental income, and interest are
that cost $10.20 a share in 1984. The stock had a the only items of income received between January 1 and
mean selling price (midpoint between highest and low- the date of your father’s death. You will have to file an in-
est selling price) of $25 a share on the date of death. come tax return for the period during which your father
Your father also owned 500 shares of XYZ Company lived. (You determine that your father timely filed the 2022
stock that cost $30 a share in 1989. The stock had a income tax return before your father died.) The final return
mean selling price on the date of death of $22. isn't due until April 15, 2024, the same date it would have
been due had your father lived during all of 2023.
• The appraiser valued your father's automobile at
$6,300 and the household effects at $18,500. The check representing unpaid salary and earned but
• Your father's employer sent a check to your mother for unused vacation time wasn't paid to your father before the
$11,082 ($12,000 − $918 for social security and Medi- date of death, so the $12,000 isn't reported as income on
care taxes), representing unpaid salary and payment the final return. It is reported on the income tax return for
for accrued vacation time. The statement that came the estate (Form 1041) for 2023. The only taxable income
with the check indicated that no amount was withheld to be reported for your father will be the $20,000 salary (as
for income tax. The check was made out to the estate, shown in box 1 of the Form W-2), the $1,900 interest, and
so your mother gave you the check. your father’s portion of the rental income that was received
in 2023.
• The Easy Life Insurance Company gave your mother a
check for $275,000 because your mother was the Your father was a cash basis taxpayer and didn't report
beneficiary of your father’s life insurance policy. the interest accrued on the series EE U.S. savings bonds
on prior tax returns that were filed jointly with your mother.
• Your father was the owner of several series EE U.S. As the personal representative of your father's estate, you
savings bonds on which your father named your choose to report the interest earned on these bonds be-
mother as co-owner. Your father purchased the bonds fore your father's death ($840) on the final income tax re-
during the past several years. The cost of these bonds turn.
totaled $2,500. After referring to the appropriate table
of redemption values (see U.S. savings bonds ac- The rental property was leased the entire year of 2023
quired from decedent, earlier), you determine that in- for $1,000 per month. This is a net lease through the date
terest of $840 had accrued on the bonds at the date of of sale. The rental does not rise to the level of a section
your father's death. You must include the redemption 162 trade or business. Thus, it doesn’t qualify for the sec-
value of these bonds at date of death, $3,340, in your tion 199A deduction. Under local law, your parents (as
father's gross estate. joint tenants) each had a half interest in the income from
the property. Your father's will, however, stipulates that the
• On July 1, 1996, your parents purchased a house for
entire rental income is to be paid directly to your mother.
$90,000. They have held the property for rental purpo-
None of the rental income will be reported on the income
ses continuously since its purchase. Your mother paid
tax return for the estate. Instead, your mother will report all
one-third of the purchase price, or $30,000, and your
the rental income and expenses on Form 1040 or
father paid $60,000. They owned the property, how-
1040-SR.
ever, as joint tenants with right of survivorship. An ap-
praiser valued the property at $120,000. You include Checking the records and prior tax returns of your pa-
$60,000, one-half the value, in your father's gross es- rents, you find that they previously elected to use the ADS
tate because your parents owned the property as joint with the mid-month convention. Under ADS, the rental
tenants with right of survivorship and they were the house is depreciated using the straight line method over a
only joint tenants. 40-year recovery period. They allocated $15,000 of the

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cost to the land (which is never depreciable) and $75,000                  a. Your mother's cost basis ($45,000) minus one-half 
to the rental house. Salvage value was disregarded for the                        of the amount allocated to the land ($7,500) is 
depreciation  computation.  Before  2023,  $23,359  had                           your mother’s depreciable basis ($37,500) for half 
been  allowed  as  depreciation.  (For  information  on  ADS,                     of the property. She continues to use the same life 
see Pub. 946.)                                                                    and depreciation method as was originally used 
                                                                                  for the property. The amount deductible for the re-
Deductions.  During the year, you received a bill from the                        maining 8 /  months is $664.1 2
hospital for $945 and bills from your father's doctors total-
ing $685. You paid these bills as they were presented. In                  b. The other half of the property must be depreciated 
addition, you find other bills from your father’s doctors to-                     using a depreciation method that is acceptable for 
taling $5,302 that your father paid in 2023 and receipts for                      property placed in service in 2023. You chose to 
prescribed  drugs  purchased  totaling  $1,724.  The  funeral                     use ADS with the mid-month convention. The 
home presented you a bill for $6,890 for the expenses of                          value included in the estate ($60,000) less the 
your father's funeral, which you paid.                                            value allocable to the land ($10,000) is the depre-
The medical expenses you paid from the estate's funds                             ciable basis ($50,000) for this half of the property. 
($945 and $685) were for your father's care and were paid                         The amount deductible for this half of the property 
within 1 year after the date of death. They won't be used to                      is $886 ($50,000 × 0.01771). See chapter 4 and 
figure the taxable estate, so you can treat them as having                        Table A-13 in Pub. 946.
been paid by your father when medical services were re-                    Show the total of the amounts in (1) and (2a) above on 
ceived.  See Medical  Expenses  under                   Final  Income  Tax line  17  of  Form  4562,  Depreciation  and  Amortization. 
Return  for  Decedent—Form  1040  or  1040-SR,  earlier.                   Show the amount in (2b) on line 20d. The total deprecia-
However, you can't deduct the funeral expenses either on                   tion deduction allowed for the year is $2,097.
your father's final return or on the estate's income tax re-
turn. They are deductible only on the federal estate tax re-               Filing  status.    After  December  31,  2023,  when  your 
turn (Form 706).                                                           mother  determines  the  amount  of  your  mother’s  income, 
In  addition,  after  going  over  other  receipts  and  can-              you and your mother must decide whether you will file a 
celed checks for the tax year with your mother, you deter-                 joint return or separate returns for your parents for 2023. 
mine  that  the  following  items  are  deductible  on  your  pa-          Your  mother  has  rental  income  and  $400  of  interest  in-
rents' 2023 income tax return.                                             come from the savings account at the Mayflower Bank of 
                                                                           Juneville, so it appears to be to your mother’s advantage 
Health insurance. . . . . . . . . . . . . . . . . . . . . . . . . $4,250   to file a joint return.
State income tax paid. . . . . . . . . . . . . . . . . . . . . .  $1,491
Real estate tax on home. . . . . . . . . . . . . . . . . . . . .  $7,500   Tax  computation.        The  refund  of  tax  due  is  $152.  The 
Contributions to church. . . . . . . . . . . . . . . . . . . . .  $4,830   computation is as follows:

Rental expenses included real estate taxes of $700 and                     Income:
mortgage  interest  of  $410.  In  addition,  insurance  premi-            Salary (per Form W-2). . . . . . . . . . . .           $20,000
ums  of  $260  and  painting  and  repair  expenses  for  $350             Interest income. . . . . . . . . . . . . . .               3,140
were paid. These rental expenses totaled $1,720 and are                    Net rental income    . . . . . . . . . . . . .             8,183
reflected on Schedule E (Form 1040).                                       Adjusted gross income. . . . . . . . . . . . . . . . . . . .     $31,323
Your mother and father owned the property as joint ten-                    Minus: Itemized deductions. . . . . . . . . . . . . . .          24,378
ants with right of survivorship and they were the only joint               Balance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,945
tenants, so your mother’s basis in this property upon your                 Taxable income . . . . . . . . . . . . . . . . . . . . . . . . . 6,945
father's  death  is  $93,047.  This  is  figured  by  adding  the 
$60,000 value of the half interest included in your father's               Income tax from tax table. . . . . . . . . . . . . . . . . . .   $693
gross  estate  to  your  mother's  $45,000  share  of  the  cost           Minus: Tax withheld. . . . . . . . . . . . . . . . . . . .       $845
basis and subtracting your mother's $11,953 share of de-                   Refund of taxes. . . . . . . . . . . . . . . . . . . . . . . .   $152
preciation (including 2023 depreciation for the period be-
fore your father's death), as explained next.
For 2023, you must make the following computations to                      Income Tax Return of an 
figure the depreciation deduction.                                         Estate—Form 1041

1. For the period before your father's death, depreciate                   2023 income tax return.              Having determined the tax lia-
   the property using the same method, basis, and life                     bility for your father's final return, you now figure the es-
   used by your parents in previous years. They used the                   tate's taxable income. You decide to use the calendar year 
   mid-month convention, so the amount deductible for                      and the cash method of accounting to report the estate's 
   3 /  months is $547. (This brings the total deprecia-1 2                income. This return is also due by April 15, 2024.
   tion to $23,906 ($23,359 + $547) at the time of your                    In  addition  to  the  amount  you  received  from  your  fa-
   father's death.)                                                        ther's  employer  for  unpaid  salary  and  for  vacation  pay 
2. For the period after your father's death, you must                      ($12,000)  entered  on  line  8,  you  received  a  dividend 
   make two computations.                                                  check  from  the  XYZ  Company  on  June  16,  2023.  The 
                                                                           check  was  for  $750  and  you  enter  it  on  line  2a.  The 

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amount is a qualified dividend and you show the allocation                     Gross income:
to the beneficiaries and the estate on line 2b. The amount                     Income in respect of a decedent. . . . . . . . . . . . . .             $12,000
allocated to the beneficiary ($179) is based on the distrib-                   Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . .       750
utable dividend income before any deductions. The estate                       Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2,250
received  a  Form  1099-INT  showing  $2,250  interest  paid                                                                                          $15,000
by the bank on the savings account in 2023 after your fa-                      Minus: Deductions and income distribution
ther died. Show this amount on line 1.                                         Real estate taxes. . . . . . . . . . . . . . . .             $2,250
                                                                               Attorney's fees    . . . . . . . . . . . . . . . . . .         1,325
Deductions.         In November 2023, you received a bill for                  Exemption. . . . . . . . . . . . . . . . . . . .                 600
the real estate taxes on your parents' home. The bill was                      Distribution   . . . . . . . . . . . . . . . . . . . .         2,000   6,175
for  $2,250,  which  you  paid.  Include  real  estate  taxes  on              Taxable income. . . . . . . . . . . . . . . . . . . . . . . . . .      $8,825
line 11.
You paid $1,325 for attorney's fees in connection with                         The estate had taxable income of $8,825 that included 
administration of the estate. This is an expense of admin-                     $571 of qualified dividends for the year, which leaves the 
istration and is deducted on line 14. If an estate tax return                  estate  with  a  tax  due  of  $1,661  for  2023.  To  figure  the 
is filed on Form 706, you must, however, file with the re-                     amount  due,  see  the  Qualified  Dividends  Tax  Work-
turn  a  statement  in  duplicate  that  such  expense  hasn't                 sheet—Schedule  G,  line  1a,  in  the                 Instructions  for  Form 
been claimed as a deduction from the gross estate for fig-                     1041.
uring the federal estate tax on Form 706, and that all rights 
                                                                               2024  income  tax  return  for  estate.                        On  January  7, 
to claim that deduction on Form 706 are waived.
                                                                               2024,  you  receive  a  dividend  check  from  the  XYZ  Com-
Distributions.        You  made  a  distribution  of  $2,000  to               pany for $500. You also have interest posted to the sav-
your  father's  brother,  Jamie.  The  distribution  was  made                 ings  account  in  January  totaling  $350.  On  January  28, 
from current income of the estate under the terms of the                       2024, you make a final accounting to the court and obtain 
will.                                                                          permission to close the estate. In the accounting, you list 
The  income  distribution  deduction  ($2,000)  is  figured                    $1,650 as the balance of the expense of administering the 
on Schedule B of Form 1041 and deducted on line 18.                            estate.
You characterized the $2,000 that is included in income                        You  advise  the  court  that  you  plan  to  pay  $5,000  to 
and reported it on Schedule K-1 (Form 1041) as follows:                        Hometown  Church  under  the  provisions  of  the  will,  and 
                                                                               that you will distribute the balance of the property to your 
      Step 1 — Allocation of Income & Deductions                               mother, the remaining beneficiary.
                                                                Distributable  Gross income.                After making the distributions already 
Type of Income                    Amount Deductions                 Net Income described, you can wind up the affairs of the estate. The 
                                                                               gross income of the estate for 2024 is more than $600, so 
Interest (15%)                    $ 2,250             ($536)        $ 1,714
Dividends (5%)                          750             (179)       571        you  must  file  a  final  income  tax  return,  Form  1041,  for 
Other Income (80%)                  12,000            (2,860)       9,140      2024 (not shown). The estate's gross income for 2024 is 
Total                             $15,000         ($3,575)          $11,425    $850 (dividends of $500 and interest of $350).
                                                                               Deductions.            After making the following computations, 
        Step 2 — Allocation of Distribution                                    you determine that none of the distributions made to your 
        (Report on the Schedule K-1 for Jamie)                                 mother must be included in your mother’s taxable income 
                                                                               for 2024.
Line 1—Interest 
$2,000 × (1,714 ÷ 11,425). . . . . . . . . . . . . . . . . .        $300       Gross income for 2024:
Line 2b—Total dividends                                                        Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . .       $500
$2,000 × (571 ÷ 11,425)     . . . . . . . . . . . . . . . . . . .   100        Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . .      350
Line 5—Other income                                                                                                                                   $850
$2,000 × (9,140 ÷ 11,425). . . . . . . . . . . . . . . . . .        1,600      Less deductions:
Total Distribution. . . . . . . . . . . . . . . . . . . . . . . . . $2,000     Administration expense. . . . . . . . . . . . . . . . . . .            $1,650
                                                                               Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ($800)
The  estate  took  an  income  distribution  deduction,  so 
you must prepare Schedule I (Form 1041), regardless of                         Note that because the contribution of $5,000 to Home-
whether the estate is liable for the AMT.                                      town Church wasn't required under the terms of the will to 
The other distribution you made from the assets of the                         be paid out of the gross income of the estate, it isn't de-
estate in 2023 was the transfer of the automobile to your                      ductible and wasn't included in the computation.
mother on July 1. This is included in the bequest of prop-                     The estate had no distributable net income in 2024, so 
erty, so it isn't included in computing the distributions of in-               none of the distributions made to your mother have to be 
come  to  the  beneficiary.  The  life  insurance  proceeds  of                included in your mother’s gross income.
$275,000  paid  directly  to  your  mother  by  the  insurance 
company aren't an asset of the estate.
Tax  computation.             The  taxable  income  of  the  estate 
for 2023 is $8,825, figured as follows:

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Table A. Checklist of Forms and Due Dates for Executor,

Administrator, or Personal Representative

Form No. Title Due Date**
SS-4 Application for Employer Identification Number As soon as possible. The identification number
must be included in returns, statements, and other
documents.
56 Notice Concerning Fiduciary Relationship As soon as all necessary information is available.*
706 United States Estate (and Generation-Skipping Transfer) Tax 9 months after date of decedent's death.
Return
706-A United States Additional Estate Tax Return 6 months after cessation or disposition of
special-use valuation property.
706-GS(D) Generation-Skipping Transfer Tax Return for Distributions Generally, April 15th of the year after the distribution.
706-GS(D-1) Notification of Distribution From a Generation-Skipping Trust Generally, April 15th of the year after the distribution.
706-GS(T) Generation-Skipping Transfer Tax Return for Terminations Generally, April 15th of the year after the taxable
termination.
706-NA United States Estate (and Generation-Skipping Transfer) Tax 9 months after date of decedent's death.
Return, Estate of nonresident not a citizen of the United
States
709 United States Gift (and Generation-Skipping Transfer) Tax April 15th of the year after the gift was made.
Return
712 Life Insurance Statement Part I to be filed with estate tax return.
1040 U.S. Individual Income Tax Return Generally, April 15th of the year after death.**
1040-SR U.S. Tax Return for Seniors Generally, April 15th of the year after death.**
1040-NR U.S. Nonresident Alien Income Tax Return See form instructions.
1041 U.S. Income Tax Return for Estates and Trusts 15th day of 4th month after end of estate's tax
year.**
1041-T Allocation of Estimated Tax Payments to Beneficiaries 65th day after end of estate's tax year.
1041-ES Estimated Income Tax for Estates and Trusts Generally, April 15th, June 15th, Sept. 15th, and
Jan. 15th for calendar-year filers.**
1042 Annual Withholding Tax Return for U.S. Source Income of March 15th.**
Foreign Persons
1042-S Foreign Person's U.S. Source Income Subject to Withholding March 15th.**
4768 Application for Extension of Time To File a Return and/or Pay See form instructions.
U.S. Estate (and Generation-Skipping Transfer) Taxes
4810 Request for Prompt Assessment Under Internal Revenue As soon as possible after filing Form 1040 or Form
Code Section 6501(d) 1041.
4868 Application for Automatic Extension of Time To File U.S. April 15th.**
Individual Income Tax Return
5495 Request for Discharge From Personal Liability Under Internal See form instructions.
Revenue Code Section 2204 or 6905
7004 Application for Automatic Extension of Time To File Certain 15th day of 4th month after end of estate's tax
Business Income Tax, Information, and Other Returns year.**
8300 Report of Cash Payments Over $10,000 Received in a Trade 15th day after the date of the transaction.
or Business
8822 Change of Address As soon as the address is changed.
8822-B Change of Address or Responsible Party — Business As soon as the address is changed.
8892 Application for Automatic Extension of Time To File Form 709 April 15th.**
and Form 709-NA and/or Payment of Gift/
Generation-Skipping Transfer Tax
* A personal representative must report the termination of the estate, in writing, to the IRS. Form 56 can be used for this purpose.
** If the due date falls on a Saturday, Sunday, or legal holiday, file on the next business day.

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Table B. Worksheet To Reconcile 

Amounts Reported in Name of Decedent 

on Information Returns (Forms W-2, 

1099-INT, 1099-DIV, etc.)                                                          Keep for Your Records
Name of Decedent                               Date of Death      Decedent's Social Security Number

Name of Personal Representative, Executor, or Administrator       Estate's Employer Identification Number (If Any)

                                               A.                  B.              C.                             D.
                                               Enter total amount Enter part of    Amount           Part of column C 
                                               shown on           amount in column reportable on    that is income in 
                   Source                      information return A reportable on  estate's or                    respect of a 
                (list each payer)                                 decedent's final beneficiary's                  decedent
                                                                   return          income tax 
                                                                                   return (column A 
                                                                                   minus column B)
1. Wages

2. Interest income

3. Dividends

4. State income tax refund
5. Capital gains
6. Pension income

7. Rents, royalties

8. Taxes withheld*

9. Other items, such as social security, 
business and farm income or loss, 
unemployment compensation, etc.

* List each withholding agent (employer, etc.).

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                                                                    • The Online EIN Application IRS.gov/EIN ( ) helps you 
                                                                      get an employer identification number (EIN), at no 
How To Get Tax Help                                                   cost.
If you have questions about a tax issue; need help prepar-          • The Tax Withholding Estimator IRS.gov/W4App (      ) 
ing your tax return; or want to download free publications,           makes it easier for you to estimate the federal income 
forms, or instructions, go to IRS.gov to find resources that          tax you want your employer to withhold from your pay-
can help you right away.                                              check. This is tax withholding. See how your withhold-
                                                                      ing affects your refund, take-home pay, or tax due.
Preparing and filing your tax return. After receiving all 
                                                                    • The First-Time Homebuyer Credit Account Look-up 
your wage and earnings statements (Forms W-2, W-2G, 
                                                                      (IRS.gov/HomeBuyer) tool provides information on 
1099-R,  1099-MISC,  1099-NEC,  etc.);  unemployment 
                                                                      your repayments and account balance.
compensation statements (by mail or in a digital format) or 
other  government  payment  statements  (Form  1099-G);             • The Sales Tax Deduction Calculator IRS.gov/ (
and  interest,  dividend,  and  retirement  statements  from          SalesTax) figures the amount you can claim if you 
banks and investment firms (Forms 1099), you have sev-                itemize deductions on Schedule A (Form 1040).
eral options to choose from to prepare and file your tax re-                Getting  answers  to  your  tax  questions.  On 
turn.  You  can  prepare  the  tax  return  yourself,  see  if  you         IRS.gov,  you  can  get  up-to-date  information  on 
qualify for free tax preparation, or hire a tax professional to             current events and changes in tax law.
prepare your return.
                                                                    • IRS.gov/Help: A variety of tools to help you get an-
Free options for tax preparation.    Your options for pre-            swers to some of the most common tax questions.
paring  and  filing  your  return  online  or  in  your  local  com-
                                                                    • IRS.gov/ITA: The Interactive Tax Assistant, a tool that 
munity, if you qualify, include the following.
                                                                      will ask you questions and, based on your input, pro-
•  Free File. This program lets you prepare and file your             vide answers on a number of tax topics.
   federal individual income tax return for free using soft-
                                                                    • IRS.gov/Forms: Find forms, instructions, and publica-
   ware or Free File fillable forms. However, state tax 
                                                                      tions. You will find details on the most recent tax 
   preparation may not be available through Free File. Go 
                                                                      changes and interactive links to help you find answers 
   to IRS.gov/FreeFile to see if you qualify for free online 
                                                                      to your questions.
   federal tax preparation, e-filing, and direct deposit or 
   payment options.                                                 • You may also be able to access tax information in your 
                                                                      e-filing software.
•  VITA. The Volunteer Income Tax Assistance (VITA) 
   program offers free tax help to people with 
   low-to-moderate incomes, persons with disabilities,              Need someone to prepare your tax return?             There are 
   and limited-English-speaking taxpayers who need                  various  types  of  tax  return  preparers,  including  enrolled 
   help preparing their own tax returns. Go to IRS.gov/             agents, certified public accountants (CPAs), accountants, 
   VITA, download the free IRS2Go app, or call                      and many others who don’t have professional credentials. 
   800-906-9887 for information on free tax return prepa-           If  you  choose  to  have  someone  prepare  your  tax  return, 
   ration.                                                          choose that preparer wisely. A paid tax preparer is:
•  TCE. The Tax Counseling for the Elderly (TCE) pro-               • Primarily responsible for the overall substantive accu-
   gram offers free tax help for all taxpayers, particularly          racy of your return,
   those who are 60 years of age and older. TCE volun-
                                                                    • Required to sign the return, and
   teers specialize in answering questions about pen-
   sions and retirement-related issues unique to seniors.           • Required to include their preparer tax identification 
   Go to IRS.gov/TCE or download the free IRS2Go app                  number (PTIN).
   for information on free tax return preparation.                          Although the tax preparer always signs the return, 
•  MilTax. Members of the U.S. Armed Forces and quali-              !       you're  ultimately  responsible  for  providing  all  the 
   fied veterans may use MilTax, a free tax service of-             CAUTION information required for the preparer to accurately 
   fered by the Department of Defense through Military              prepare your return and for the accuracy of every item re-
   OneSource. For more information go to                            ported on the return. Anyone paid to prepare tax returns 
   MilitaryOneSource (MilitaryOneSource.mil/MilTax).                for  others  should  have  a  thorough  understanding  of  tax 
      Also, the IRS offers Free Fillable Forms, which can           matters. For more information on how to choose a tax pre-
   be completed online and then e-filed regardless of in-           parer, go to Tips for Choosing a Tax Preparer on IRS.gov.
   come.
                                                                    Employers can register to use Business Services On-
Using online tools to help prepare your return.    Go to            line. The Social Security Administration (SSA) offers on-
IRS.gov/Tools for the following.                                    line service at SSA.gov/employer for fast, free, and secure 
•  The Earned Income Tax Credit Assistant IRS.gov/ (                online  W-2  filing  options  to  CPAs,  accountants,  enrolled 
   EITCAssistant) determines if you’re eligible for the             agents,  and  individuals  who  process  Form  W-2,  Wage 
   earned income credit (EIC).

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and Tax Statement, and Form W-2c, Corrected Wage and Getting tax forms and publications. Go to IRS.gov/
Tax Statement. Forms to view, download, or print all of the forms, instruc-
tions, and publications you may need. Or, you can go to
IRS Social Media. Go to IRS.gov/SocialMedia to see the IRS.gov/OrderForms to place an order.
various social media tools the IRS uses to share the latest
information on tax changes, scam alerts, initiatives, prod- Getting tax publications and instructions in eBook
ucts, and services. At the IRS, privacy and security are our format. Download and view most tax publications and in-
highest priority. We use these tools to share public infor- structions (including the Instructions for Form 1040) on
mation with you. Don’t post your social security number mobile devices as eBooks at IRS.gov/eBooks.
(SSN) or other confidential information on social media IRS eBooks have been tested using Apple's iBooks for
sites. Always protect your identity when using any social iPad. Our eBooks haven’t been tested on other dedicated
networking site. eBook readers, and eBook functionality may not operate
The following IRS YouTube channels provide short, in- as intended.
formative videos on various tax-related topics in English,
Spanish, and ASL. Access your online account (individual taxpayers
only). Go to IRS.gov/Account to securely access infor-
• Youtube.com/irsvideos. mation about your federal tax account.
• Youtube.com/irsvideosmultilingua. • View the amount you owe and a breakdown by tax
• Youtube.com/irsvideosASL. year.
Watching IRS videos. The IRS Video portal • See payment plan details or apply for a new payment
(IRSVideos.gov) contains video and audio presentations plan.
for individuals, small businesses, and tax professionals. • Make a payment or view 5 years of payment history
and any pending or scheduled payments.
Online tax information in other languages. You can
find information on IRS.gov/MyLanguage if English isn’t • Access your tax records, including key data from your
your native language. most recent tax return, and transcripts.
• View digital copies of select notices from the IRS.
Free Over-the-Phone Interpreter (OPI) Service. The
IRS is committed to serving taxpayers with limited-English • Approve or reject authorization requests from tax pro-
proficiency (LEP) by offering OPI services. The OPI Serv- fessionals.
ice is a federally funded program and is available at Tax- • View your address on file or manage your communica-
payer Assistance Centers (TACs), most IRS offices, and tion preferences.
every VITA/TCE tax return site. The OPI Service is acces-
sible in more than 350 languages. Get a transcript of your return. With an online account,
you can access a variety of information to help you during
Accessibility Helpline available for taxpayers with the filing season. You can get a transcript, review your
disabilities. Taxpayers who need information about ac- most recently filed tax return, and get your adjusted gross
cessibility services can call 833-690-0598. The Accessi- income. Create or access your online account at IRS.gov/
bility Helpline can answer questions related to current and Account.
future accessibility products and services available in al-
ternative media formats (for example, braille, large print, Tax Pro Account. This tool lets your tax professional
audio, etc.). The Accessibility Helpline does not have ac- submit an authorization request to access your individual
cess to your IRS account. For help with tax law, refunds, or taxpayer IRS online account. For more information, go to
account-related issues, go to IRS.gov/LetUsHelp. IRS.gov/TaxProAccount.

Note. Form 9000, Alternative Media Preference, or Using direct deposit. The safest and easiest way to re-
Form 9000(SP) allows you to elect to receive certain types ceive a tax refund is to e-file and choose direct deposit,
of written correspondence in the following formats. which securely and electronically transfers your refund di-
rectly into your financial account. Direct deposit also
• Standard print.
avoids the possibility that your check could be lost, stolen,
• Large print. destroyed, or returned undeliverable to the IRS. Eight in
• Braille. 10 taxpayers use direct deposit to receive their refunds. If
you don’t have a bank account, go to IRS.gov/
• Audio (MP3). DirectDeposit for more information on where to find a bank
• Plain Text File (TXT). or credit union that can open an account online.

• Braille Ready File (BRF). Reporting and resolving your tax-related identity
theft issues.
Disasters. Go to IRS.gov/DisasterRelief to review the
available disaster tax relief. • Tax-related identity theft happens when someone
steals your personal information to commit tax fraud.

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Your taxes can be affected if your SSN is used to file a Note. The IRS uses the latest encryption technology to
fraudulent return or to claim a refund credit. ensure that the electronic payments you make online, by
phone, or from a mobile device using the IRS2Go app are
• The IRS doesn’t initiate contact with taxpayers by
safe and secure. Paying electronically is quick, easy, and
email, text message (including shortened links), tele-
faster than mailing in a check or money order.
phone calls, or social media channels to request or
verify personal or financial information. This includes What if I can’t pay now? Go to IRS.gov/Payments for
requests for personal identification numbers (PINs), more information about your options.
passwords, or similar information for credit cards,
banks, or other financial accounts. • Apply for an online payment agreement (IRS.gov/
OPA) to meet your tax obligation in monthly install-
• Go to IRS.gov/IdentityTheft, the IRS Identity Theft ments if you can't pay your taxes in full today. Once
Central webpage, for information on identity theft and you complete the online process, you will receive im-
data security protection for taxpayers, tax professio- mediate notification of whether your agreement has
nals, and businesses. If your SSN has been lost or been approved.
stolen or you suspect you’re a victim of tax-related
identity theft, you can learn what steps you should • Use the Offer in Compromise Pre-Qualifier to see if
take. you can settle your tax debt for less than the full
amount you owe. For more information on the Offer in
• Get an Identity Protection PIN (IP PIN). IP PINs are Compromise program, go to IRS.gov/OIC.
six-digit numbers assigned to taxpayers to help pre-
vent the misuse of their SSNs on fraudulent federal in- Filing an amended return. Go to IRS.gov/Form1040X
come tax returns. When you have an IP PIN, it pre- for information and updates.
vents someone else from filing a tax return with your
SSN. To learn more, go to IRS.gov/IPPIN. Checking the status of your amended return. Go to
IRS.gov/WMAR to track the status of Form 1040-X amen-
Ways to check on the status of your refund. ded returns.
• Go to IRS.gov/Refunds. It can take up to 3 weeks from the date you filed
• Download the official IRS2Go app to your mobile de- ! your amended return for it to show up in our sys-
vice to check your refund status. CAUTION tem, and processing it can take up to 16 weeks.

• Call the automated refund hotline at 800-829-1954.
Understanding an IRS notice or letter you’ve re-
The IRS can’t issue refunds before mid-February ceived. Go to IRS.gov/Notices to find additional informa-
! for returns that claimed the EIC or the additional tion about responding to an IRS notice or letter.
CAUTION child tax credit (ACTC). This applies to the entire
refund, not just the portion associated with these credits. Responding to an IRS notice or letter. You can now
upload responses to all notices and letters using the
Making a tax payment. Payments of U.S. tax must be Document Upload Tool. For notices that require additional
remitted to the IRS in U.S. dollars. Digital assets are not action, taxpayers will be redirected appropriately on
accepted. Go to IRS.gov/Payments for information on how IRS.gov to take further action. To learn more about the
to make a payment using any of the following options. tool, go to IRS.gov/Upload.

• IRS Direct Pay: Pay your individual tax bill or estimated Note. You can use Schedule LEP (Form 1040), Re-
tax payment directly from your checking or savings ac- quest for Change in Language Preference, to state a pref-
count at no cost to you. erence to receive notices, letters, or other written commu-
nications from the IRS in an alternative language. You may
• Debit Card, Credit Card, or Digital Wallet: Choose an
not immediately receive written communications in the re-
approved payment processor to pay online or by
quested language. The IRS’s commitment to LEP taxpay-
phone.
ers is part of a multi-year timeline that began providing
• Electronic Funds Withdrawal: Schedule a payment translations in 2023. You will continue to receive communi-
when filing your federal taxes using tax preparation cations, including notices and letters, in English until they
software or through a tax professional. are translated to your preferred language.
• Electronic Federal Tax Payment System: Best option
Contacting your local TAC. Keep in mind, many ques-
for businesses. Enrollment is required.
tions can be answered on IRS.gov without visiting a TAC.
• Check or Money Order: Mail your payment to the ad- Go to IRS.gov/LetUsHelp for the topics people ask about
dress listed on the notice or instructions. most. If you still need help, TACs provide tax help when a
tax issue can’t be handled online or by phone. All TACs
• Cash: You may be able to pay your taxes with cash at
now provide service by appointment, so you’ll know in ad-
a participating retail store.
vance that you can get the service you need without long
• Same-Day Wire: You may be able to do same-day wait times. Before you visit, go to IRS.gov/TACLocator to
wire from your financial institution. Contact your finan- find the nearest TAC and to check hours, available serv-
cial institution for availability, cost, and time frames. ices, and appointment options. Or, on the IRS2Go app,

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under the Stay Connected tab, choose the Contact Us op- How Can You Reach TAS?
tion and click on “Local Offices.”
TAS has offices in every state, the District of Columbia,
and Puerto Rico. To find your advocate’s number:
The Taxpayer Advocate Service (TAS)
Is Here To Help You • Go to TaxpayerAdvocate.IRS.gov/Contact-Us;
What Is TAS? • Download Pub. 1546, The Taxpayer Advocate Service
Is Your Voice at the IRS, available at IRS.gov/pub/irs-
TAS is an independent organization within the IRS that pdf/p1546.pdf;
helps taxpayers and protects taxpayer rights. TAS strives • Call the IRS toll free at 800-TAX-FORM
to ensure that every taxpayer is treated fairly and that you (800-829-3676) to order a copy of Pub. 1546;
know and understand your rights under the Taxpayer Bill
of Rights. • Check your local directory; or
• Call TAS toll free at 877-777-4778.
How Can You Learn About Your Taxpayer
Rights? How Else Does TAS Help Taxpayers?

The Taxpayer Bill of Rights describes 10 basic rights that TAS works to resolve large-scale problems that affect
all taxpayers have when dealing with the IRS. Go to many taxpayers. If you know of one of these broad issues,
TaxpayerAdvocate.IRS.gov to help you understand what report it to TAS at IRS.gov/SAMS. Be sure to not include
these rights means to you and how they apply. These are any personal taxpayer information.
your rights. Know them. Use them.
Low Income Taxpayer Clinics (LITCs)
What Can TAS Do for You?
LITCs are independent from the IRS and TAS. LITCs rep-
TAS can help you resolve problems that you can’t resolve resent individuals whose income is below a certain level
with the IRS. And their service is free. If you qualify for and who need to resolve tax problems with the IRS. LITCs
their assistance, you will be assigned to one advocate can represent taxpayers in audits, appeals, and tax collec-
who will work with you throughout the process and will do tion disputes before the IRS and in court. In addition,
everything possible to resolve your issue. TAS can help LITCs can provide information about taxpayer rights and
you if: responsibilities in different languages for individuals who
• Your problem is causing financial difficulty for you, speak English as a second language. Services are offered
your family, or your business; for free or a small fee. For more information or to find an
LITC near you, go to the LITC page at
• You face (or your business is facing) an immediate TaxpayerAdvocate.IRS.gov/LITC or see IRS Pub. 4134,
threat of adverse action; or Low Income Taxpayer Clinic List , at IRS.gov/pub/irs-pdf/
• You’ve tried repeatedly to contact the IRS but no one p4134.pdf.
has responded, or the IRS hasn’t responded by the
date promised.

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                   To help us develop a more useful index, please let us know if you have ideas for index entries.
Index              See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
 
                                    Not treated as bequests  34
A                                   Property, in kind 28                  G
Accelerated death benefits   8 19,                                        Gift, property 18
Archer MSA   8 17,                 E
Assistance (See Tax help)          Education savings account,             I
Astronauts:                         Coverdell 8 17,                       Identification number, 
 Tax forgiveness   11              Estate:                                 application   3
                                    Income tax return 22                  Income:
B                                   Insolvent 4                            Community   8
Basis:                              Period of administration 35            Distributable net income    27
 Inherited property  20             Tax deduction  17                      Distributed currently 31
 Joint interest property  20        Termination  35                        Interest and dividend      7
 Qualified joint interest 20        Transfer of unused deductions      35  Partnership, final return   7
Beneficiary:                       Estate tax deduction  17                S corporation  7
 Basis of property 20              Estimated tax 29 36,                    Self-employment   7
 Character of distributions  32    Example:                               Income in respect of decedent                    13, 
 Excess deductions    35            Comprehensive     40                   16
 Income received   21               Decedent's final return 41            Income tax return of an estate:
 Liability, estate's income tax 23  Estate's tax return 42                 Credits, tax, and payments                    29
 Nonresident alien   23            Exemption:                              Exemption and deductions                      25
 Reporting distributions  33        Estate's tax return 26                 Filing requirements 22
 Successor   35                    Expenses:                               Income to include   24
 Treatment of distributions  31     Accrued   27                           Name, address, and signature                    30
 Unused loss carryovers    35       Administration  26                     When and where to file      30
Bequest:                            Deductions in respect of              Inherited IRAs 22
 Defined 34                         decedent     17                       Inherited property 18
 Property received   18             Funeral  29                           Installment obligations      14 25, 
                                    Medical  8 29,                        Insurance 18
C                                  Extension to file Form 1041       30
                                                                          J
Claim, credit or refund   11
                                   F
Combat zone    10                                                         Joint return:
Comments   2                       Fiduciary relationship  4               Revoked by personal 
Coverdell education savings        Filing requirements:                      representative  6
 account (ESA)     8 17,            Decedent's final return 5              Who can file  6
Credit:                             Estate's tax return 22
 Child tax 10                      Final return for decedent:             L
 Earned income    10                Credits  10                           Losses:
 Elderly or disabled 10             Exemption and deductions         8     Deduction on final return    9
 Final return for decedent  10      Filing requirements  5                 Estate's tax return 26
 General business    10             Income to include   6
                                    Joint return 6                        M
D                                   Name, address, and signature       5  Military or terrorist actions:
Death benefits:                     Other taxes  10                        Claim for credit or refund   11
 Accelerated   8 19,                Payments  10                           Defined 11
 Public safety officers 21          When and where to file  5              Tax forgiveness 10
Decedent:                           Who must file  5
 Final return 5                    Form:                                  N
 Income in respect of   13          1040-NR   6 23,                       Notice of fiduciary relationship:
Deductions:                         1041   22                              Form 56  4
 Estate tax 17                      1042   23
 In respect of decedent   17        1310   6                              P
 Medical expenses    8              4810   4                              Partnership income   7 15, 
 Standard  8                        56 4                                  Penalty:
Distributable net income   27       6251   10                              Information returns 24
Distributions:                      706  36                                Substantial valuation 
 Deduction   27                     SS–4   3                                 misstatement  21
 Limit on deduction  29            Funeral expenses   29

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Personal representative:                 Information 23            Payments, final return 10
Defined 3                              Roth IRA 16                 Refund of income (claim)                              6
Duties  3                                                          Self-employment    10
Fees received 5                        S                           Transfer of credit 36
Penalty 3 4,                           Separate shares rule   27  Tax help 46
Prompt assessment, request    4        Suggestions   2            Terrorist action, tax relief 10
Public safety officers, death          Surviving spouse    13     Terrorist victim 11
benefits  21                           Survivors:
Publications (See Tax help)              Income 21                V
                                         Tax benefits 13          Valuation method:
R                                                                  Inherited property 20
Refund:                                T                           Special-use 20
File for decedent 5                    Tax:                       Victims of terrorist attacks                           11
Military or terrorist action deaths 11   Alternative minimum:
Release from liability 4                    Estate 29             W
Return:                                     Individuals 10        Widows and widowers, tax benefits 
Decedent's final  5                      Benefits, survivors 13    (See Surviving spouse)
Estate's income tax 22                   Estimated, estate 29 36, 

Publication 559 (2023)                                                                                                     51

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