• Skip to main content
  • Skip to primary sidebar

• Wayne Pa Probate Lawyers •

• John B Whalen Jr Esq •

  • Home
    • About
    • Areas
    • Awards
    • Resume
    • Reviews
  • Wayne Pa Probate
    • Blog
  • Consults
    • Subscribe
    • Archives
  • Contact
Home • Wayne Pa Estates Taxation • Wayne Pa Estate Taxation Lawyers

Wayne Pa Estate Taxation Lawyers

wayne-pa-estate-taxation-lawyers-attorneys

Click Link To Scroll To Topic

  • Wayne Pa Estate Taxation
  • Interests Served
  • Approved Fiduciary Accountings
  • Fiduciary Tax Returns – Form 1041
  • Closing Out a Fiduciary Relationship
  • The Income Taxes
  • Pa Estate Taxation – Income Tax Calculations
  • Pa Estate Taxation – Income Tax Return Filings
  • Pa Estate Taxation – Income Tax Returns – Note

Wayne Pa Estate Taxation

When an individual acts in a fiduciary capacity such as a Pa Executor of a Pa Last Will or a Pa Trustee of the financial assets of another person or entity, they have the responsibility of keeping accurate financial records.

Those records should show how money was spent, invested or distributed while under the fiduciary’s care and control. Proper accounting can bring to light the mismanagement or bad investment of funds should an issue arise with an interested party.

Interests Served

There can be a number of interested parties who may want to examine the financial records and approved fiduciary accountings. They are entitled to receive copies of all the materials such as profit and loss statements, expense reports and tax returns. You may request documentation if you are:

  • a beneficiary of an estate or trust
  • a principal of an agent acting on your behalf
  • a minor whose care is being administered through a third party fiduciary agent
  • the court who must evaluate financial matters in relation to a trust or estate

Approved Fiduciary Accountings

Certain procedures must be followed when reports are prepared to explain how the assets in an estate or trust were managed. Approved fiduciary accountings require the separation of principal and interest. You can not commingle funds that are considered principal with those that are considered income.

  • Principal = original investment + capital gains – capital losses – expenses – distributions
  • Income = money generated from the investment or use of principal

The main reason for keeping principal and income in separate accounts is that the beneficiaries of income in a trust or estate may be different than the beneficiaries of the principal in the same estate or trust.

Fiduciary Tax Returns – Form 1041

A trust or an estate is considered a separate legal entity from an individual who may be a beneficiary of that trust or estate. Therefore, it is incumbent upon the fiduciary administering the estate or trust to file a federal tax return under certain conditions.

The IRS requires a trust to file a tax return if it has any taxable income or has gross income of at least $600, regardless of whether it is taxable or not. Estates must file Form 1041 if they have gross income of $600 or more. A fiduciary must also file a return if any of the beneficiaries of the estate or trust is a non-resident alien.

Form 1041 is similar to the 1040 return used by individuals. The form is designed so estates and trusts can report income, deductions, gains, losses and any other pertinent financial information. Before funds or assets can be distributed, any tax liabilities of the estate or trust must be satisfied.

Closing Out a Fiduciary Relationship

Once all of the assets of an estate or trust have been distributed or otherwise settled, it is customary that the fiduciary is released from further responsibility. That may be done by signing a release form through the court or an agreement with the beneficiaries of the estate or trust.

The Income Taxes

Individuals make income; Estates make income

Individual income is called just that Individual Income
Estate (and Trust) income is called Fiduciary Income

Pa Estate Taxation – Income Tax Calculations

In general, income and deductions for Individuals and Estates is

Decided in the same manner
Calculated in the same manner Reported in the same manner

Pa Estate Taxation – Income Tax Return Filings

Filing Requirements
Individuals must file Individual Income Tax returns
Estates (and Trusts) must file Fiduciary Income Tax returns

Pa Estate Taxation – Income Tax Returns – Note

For further reference, the IRS website states that:
The U.S. Income Tax Return for Estates and Trusts (Form 1041) is used
to report the income, deductions, gains, and losses of estates and trusts,
as well as distributions to beneficiaries and income tax liability.

John B. Whalen, Jr., Esq. · March 7, 2020 · Leave a Comment Wayne Pa Estates Taxation Wayne Pa Inheritance Taxes, Wayne Pa Last Wills

About John B. Whalen, Jr., Esq.

John B Whalen Jr Esq

John B. Whalen, Jr., JD., LL.M., is an AV Peer Review Rated Preeminent 5.0 and Avvo Rated 10.0 Superb (obtaining over 95 client reviews and peer endorsements) premier and prestigious Attorney and Counselor at Law. He is featured on Martindale.com, Nolo.com, Avvo.com, Lawyers.com, Justia.com, Lawyers of Distinction, and Linkedin. He has amassed over 60 prestigious professional awards and over 5000 client reviews and endorsements.

He provides free initial consultations all seven days, provides home visits, a provides flat fee client structures. He can be reached by email at jw60297@me.com, and by telephone at 1-610-407-0220. He serves all surrounding counties, on all 7 days, from 9:00 AM to 10:00 PM, and on evenings, weekends, and holidays. His main office is located at 1199 Heyward Road Wayne Pa 19087. He can be reached by email at jw60297@me.com, and by telephone at 1-610-407-0220.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

Categories

  • Wayne Pa Attorneys Probate (1)
  • Wayne Pa Estates Administration (1)
  • Wayne Pa Estates Litigation (5)
  • Wayne Pa Estates Planning (16)
  • Wayne Pa Estates Probate (3)
  • Wayne Pa Estates Taxation (1)
  • Wayne Pa Lawyers Awards (79)
  • Wayne Pa Lawyers Locations (12)
  • Wayne Pa Lawyers Reviews (106)
  • Wayne Pa Ps – Due Influence (7)
  • Wayne Pa Ps – Funerals (1)
  • Wayne Pa Ps – Grave Sites (3)
  • Wayne Pa Ps – In Memoriam (17)
  • Wayne Pa Ps – Last Wills (2)
  • Wayne Pa Ps – Last Words (9)
  • Wayne Pa Ps – Legal Briefs (8)
  • Wayne Pa Ps – Lucid Intervals (21)
  • Wayne Pa Ps – Mental Capacity (10)
  • Wayne Pa Ps – Trust Living (27)

Popular Tags

  • Wayne Pa Agents (8)
  • Wayne Pa Beneficiaries (1)
  • Wayne Pa Executors (10)
  • Wayne Pa Guardians (1)
  • Wayne Pa Guide Estate (1)
  • Wayne Pa Guide Probate (1)
  • Wayne Pa Inheritance Taxes (1)
  • Wayne Pa Last Wills (13)
  • Wayne Pa Living Wills (3)
  • Wayne Pa Powers of Attorney (6)
  • Wayne Pa Principals (1)
  • Wayne Pa Probate Law (10)
  • Wayne Pa Surrogates (5)
  • Wayne Pa Top Probate (1)
  • Wayne Pa Trustees (6)
  • Wayne Pa Trusts (4)
  • Wayne Ps - 27 Club (6)
  • Wayne Ps - Actors (23)
  • Wayne Ps - Artists (3)
  • Wayne Ps - Bob Dylan (2)
  • Wayne Ps - Comedians (9)
  • Wayne Ps - Conan O'Brien (2)
  • Wayne Ps - David Bowie (7)
  • Wayne Ps - David Letterman (1)
  • Wayne Ps - Elton John (4)
  • Wayne Ps - File Addictions (22)
  • Wayne Ps - File Dedications (6)
  • Wayne Ps - File Personal (4)
  • Wayne Ps - File Suicides (3)
  • Wayne Ps - File Videos (90)
  • Wayne Ps - Freddie Mercury (9)
  • Wayne Ps - George Carlin (2)
  • Wayne Ps - Historical (1)
  • Wayne Ps - James Spader (4)
  • Wayne Ps - John Lennon (2)
  • Wayne Ps - Johnny Depp (1)
  • Wayne Ps - Musicians (53)
  • Wayne Ps - Painters (2)
  • Wayne Ps - Pearl Jam (3)
  • Wayne Ps - Queen (1)
  • Wayne Ps - Richard Butler (1)
  • Wayne Ps - Robin Williams (3)
  • Wayne Ps - Writers (6)

Professional

Avvo
Justia
Lawyers
Martindale
Nolo

Social

Facebook
Instagram
LinkedIn
Pinterest
Twitter

Sitemap

  • Wayne Pa Attorneys Probate
  • Wayne Pa Lawyers Awards
  • Wayne Pa Lawyers Locations
  • Wayne Pa Estates Administration
  • Wayne Pa Estates Litigation
  • Wayne Pa Estates Planning
  • Wayne Pa Estates Probate

Sitemap

  • Home
    • About
    • Areas
    • Awards
    • Resume
    • Reviews
  • Wayne Pa Probate
    • Blog
  • Consults
    • Subscribe
    • Archives
  • Contact

Serving All Areas

  • Berwyn Pa Probate Attorneys
  • Devon Pa Probate Attorneys
  • Exton Pa Probate Attorneys
  • Gladwyne Pa Probate Attorneys
  • Haverford Pa Probate Attorneys
  • Narberth Pa Probate Attorneys
  • Paoli Pa Probate Attorneys
  • Phoenixville Pa Probate Attorneys
  • Radnor Pa Probate Attorneys
  • Villanova Pa Probate Attorneys
  • Wayne Pa Probate Attorneys
  • Wynnewood Pa Probate Attorneys

Contact Us

    Please prove you are human by selecting the Plane.

    © 2021