Administrative expenses include the mortgage, condo fees, property taxes, storage fees and utility bills. These must be kept current until the estate closes. To the extent possible, the estate beneficiaries should pay these bills until the probate estate is opened.
What deductions can an estate take?
These can include:
- Probate Registry (Court) fees.
- Funeral expenses.
- Professional valuation services.
- Clearing and cleaning costs for a property.
- Legal fees for selling a property.
- Travel expenses.
- Postage costs.
- Settling Inheritance Tax with HMRC.
What is considered an estate expense?
Most expenses that a fiduciary incurs in the administration of the estate or trust are properly payable from the decedent’s assets. These include funeral expenses, appraisal fees, attorney’s and accountant’s fees, and insurance premiums.
What are costs and expenses of administration?
Administrative expenses are costs incurred to support the functioning of a business, but which are not directly related to the production of a specific product or service. Some level of administrative expenses will always be incurred as a necessary part of operations.
Can you deduct administration expenses on estate taxes?
The IRS allows for the deduction of administration expenses for estate taxes or estate income taxes, but not both. Since common estates are small enough to avoid estate taxes, the executor may use the deduction on the federal estate income tax return.
What can be deducted from the estate of a deceased person?
The following list of expenses and losses are allowed as a deduction against the gross estate of the decedent: Funeral and burial expenses of the decedent, including tombstone, monument, and burial lot costs. Administrative expenses of the estate paid to the executors and the trustees.
Can you deduct administration expenses from gross income?
In general, the IRS allows for the deduction of administration expenses from the gross income of the estate. Therefore, in addition to tracking income of the estate, the executor must also track the administration expenses of the estate.
Is the gross estate less certain deductions allowed?
The taxable estate is the gross estate less certain deductions. One of the deductions that the tax law allows is a deduction for certain expenses and losses of the decedent. The following list of expenses and losses are allowed as a deduction against the gross estate of the decedent:
