As executor or administrator of an estate, there are several aspects of tax reporting that need to be addressed. Not only are you required under your oath of fiduciary to file all necessary tax returns, but the Commissioner of Accounts will not accept a filing of a Final Account for Decedent’s Estate unless that filing is accompanied by a Tax Certificate, which certifies to the Commissioner of Accounts that all necessary tax returns have been filed.
The required tax returns related to a decedent’s estate include:
DECEDENT’S INDIVIDUAL INCOME TAX RETURNS
FEDERAL FORM 1040, “U.S. INDIVIDUAL INCOME TAX RETURN”
This is the decedent’s final Federal tax return for the year of the decedent’s death, that must be filed with the Internal Revenue Service. This return covers the period January 1st through the date of death and is due by April 15th in the year following the date of death. In addition, the personal representative should confirm that all preceding years’ tax returns were appropriately filed. If they have not, this also becomes the responsibility of the personal representative, and must be done prior to filing a Final Account for Decedent’s Estate.
{link} Form 1040_Federal Individual Tax Return
VIRGINIA FORM 760, “VIRGINIA RESIDENT INDIVIDUAL INCOME TAX RETURN”
This is the decedent’s final Virginia tax return for the year of the decedent’s death, that must be filed with the Virginia Department of Taxation. This return also covers the period January 1st through the date of death and is due by May 1st in the year following the date of death. As with the final Federal return, the personal representative should confirm that all preceding years’ tax returns were appropriately filed. If they have not, this also becomes the responsibility of the personal representative, and must be done prior to filing a Final Account for Decedent’s Estate.
{link} VA Form 760_Virginia Individual Tax Return
FIDUCIARY TAX RETURNS
FEDERAL FORM 1041, “U.S. INCOME TAX RETURN FOR ESTATES AND TRUSTS”
This is the fiduciary tax return that must be filed with the Internal Revenue Service for each calendar year in which the estate, under its own Federal Tax Identification Number, has earned more than $600.00 of gross income in that calendar year. It is due by April 15th for each preceding calendar tax year, similar to individual income tax returns. This return will report all income, deductions, and exemptions of the estate, as well as will report all Schedule K-1 activity showing the beneficiaries’ share of income, deductions, and credits.
{link} Form 1041_Federal Income Tax Return for Estates and Trusts
{link} Tax Certificate
VIRGINIA FORM 770, “VIRGINIA FIDUCIARY INCOME TAX RETURN”
This is the fiduciary tax return that must be filed with the Virginia Department of Taxation, but only if the fiduciary is required to file a Federal Form 1041 for that year. This return is due on May 1st for each preceding calendar tax year in which a Federal Form 1041 was required.
{link} VA Form 770_Virginia Fiduciary Return