Filing Final Income Tax Return for Deceased Person: Mastering Allocations, Understanding IRD and More

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, August 12, 2015

Recorded event now available

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Program Materials

This webinar will give tax advisers and professionals detailed guidance on the specific issues arising from filing the final income tax return for a deceased taxpayer. The panel will discuss the role and requirements of a personal representative filing a return under Form 1310 authority, review the mechanics of obtaining information from the IRS, offer in-depth analysis of IRD calculations, as well as reviewing the proper reporting of stock options, basis differential on covered securities, and other specific classes of income. The panel will also review planning options and available tax elections.

Description

While the general requirements of filing the return of a decedent are much the same as for living taxpayers, there are specific issues that tax advisors filing the final Form 1040 Income Tax Return for a deceased taxpayer must take into account. From basic questions such as determining who has the authorization to file a return to more complex matters such as allocating income between the individual and fiduciary tax return or coordinating tax elections, tax professionals need to know what’s required to file a final 1040 return for a taxpayer.

One of the most challenging issues arising out of filing a final tax return is determining and reporting income in respect of a decedent (IRD). Any income to which the deceased taxpayer was entitled, however reported, is considered IRD, and certain classes of income items are automatically deemed as IRD.

In addition to reporting issues, there are a number of tax elections which may be available to survivors and the estate of the decedent, depending on the taxpayer’s individual circumstances. In many cases, it is necessary for income tax advisors to coordinate with the estate’s executor or appointed personal representative to determine the tax effectiveness of certain elections, such as the IRC Section 645 election to treat a revocable trust as part of the decedent’s estate for income tax purposes. Tax advisers need to be well-versed in post-mortem planning options as part of the process of filing the final income tax return.

Listen as our expert panel discusses IRD reporting in depth, as well as describing basis adjustments that occasionally arise in reporting covered securities, available tax planning options, and other issues particular to the filing of a final individual tax return for a deceased taxpayer.

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Outline

  1. Filing requirements
  2. Income calculations
  3. Income in respect of a decedent
  4. Special income issues
    1. Stock options
    2. Basis adjustment to covered securities
  5. Available tax elections and coordination with fiduciary return to decide on available elections

Benefits

The panel will discuss these and other critical questions:

  • What are the filing requirements and determinations for a final tax return?
  • What income items must be reported as IRD?
  • How does the tax preparer report capital gains income in the case of compensatory stock options?
  • What elections may, or must, be made in preparing the final tax return?
  • What are the factors to consider in coordinating with the executor or personal representative to determine tax impact of certain elections, such as the section 645 election?

Faculty

Petrone, Debbie
Deborah Petrone, CPA, MTax, CGMA

Principal
Schlabig & Associates

Ms. Petrone manages her firm’s specialized tax services including preparing fiduciary and estate tax returns,...  |  Read More

Snelling, Linda
Linda L. Snelling

Principal
Sachs Sax Caplan

Ms. Snelling is the Chair of her firm's Estate Planning & Probate Practice Group. She devotes her practice to...  |  Read More

David N. Kass, CPA, JD
David N. Kass, CPA, JD

Kass & Kass

Mr. Kass' practice focuses on tax minimization and planning for individuals, C and S corporations, and...  |  Read More

Tereina Walk
Tereina Walk

Atty
Sachs Sax Caplan

Ms. Walk concentrates her practice in the area of estate planning & probate litigation. She is the co-author...  |  Read More

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