One of the duties of the PR is to pay all taxes due the federal government and the state government, including estate tax, real property tax, and prior to death INCOME TAX.

Individual Income Tax

In the United States, even death does not relieve the liability for income tax. Even if the taxpayer is dead on December 31, an income TAX RETURN has to be filed for the year of death. As always, the income tax return is due by April 15th of the following year. Only the income received and any deductions paid through the date of death will be reported on the return. Income such as dividends and interest received after the date of death will not be reported on the individual income tax return but on the estate income tax return. Any medical deductions on the decedent’s part paid within one year of the date of death may be deducted on the final return. All other deductions must have been paid before death to be allowable.

Estate Income Tax

Income which comes in after the date of death should not be reported on the decedent’s personal income tax return. Interest, dividends, or other income paid to the estate, must be reported on the estate income tax return. A separate tax identification number is obtained for the estate. This separate tax return lists the TAXABLE INCOME such as dividends, interest, capital gains, and rents, and allows for deductions such as legal and executor’s fees. If the estate has been distributed and closed during the tax year, each beneficiary must list his or her proportionate share of the taxable income on his or her personal tax return. If the estate is open, the taxes are paid from the estate.

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