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Understanding the tax implications of estate administration

On Behalf of | Jan 26, 2023 | Probate and Estate Administration |

As the executor of an estate, it is your responsibility to distribute the assets according to the estate’s documents. Whether you are facing a delay during the probate process or you are just navigating the executor’s role, what you may not realize is that some of the expenses are tax deductible.

Recognize the expenses you can deduct to reduce tax liability.

Estate administration expenses

Travel costs incurred to settle the probate process are deductible. The executor’s commission is deductible as well. The commission usually comes out of the funds of the estate as a percentage of the estate’s value, but it is tax deductible on the estate return.

Professional services costs

When an estate is in probate, you may want legal representation to help you navigate the process. Those costs are tax deductible. The same applies to the costs for other professional services, including accountants and preparers for the estate’s final tax return.

Asset maintenance charges

Any fees associated with maintaining, repairing or protecting the estate’s assets are deductible as well. As the executor of the estate, you have an obligation to keep all of the assets in good repair, clean and well-maintained. Any costs you incur to do so are deductible.

Additional administration fees

Appraisals, court costs, vital records fees and any costs the estate pays toward funeral expenses are also deductible.

Tax deductions are a benefit because they reduce the total tax liability and save money. Understanding the tax deductions that you can claim as the executor of the estate helps you ensure accurate tax records.