Ask the tax adviser
When funeral expenses are deductible
Dear Tax Talk:
My son passed away in July 2001. The funeral
expenses exceeded $8,000. Will any of these be tax deductions? Thank
you for your time
I have received a few questions on the same topic. There's
some confusion in this area because funeral expenses are deductible,
but only for the purposes of estate taxes, not for income tax.
Estate taxes apply to a decedent's estate if that
person dies leaving an estate worth more than $675,000 in 2001 (going
to $1 million in 2002). If the decedent has a taxable estate, then
the funeral expenses are allowed as a deduction against the value
of his assets. This then reduces the estate taxes payable.
For income tax purposes, when it comes to filing your
Form 1040, funeral expenses are not allowed as a deduction. They
are not considered medical
expenses. Neither are they miscellaneous itemized deductions.
Expenses for medical care related to a last illness would be deductible
to the extent not reimbursed by insurance.
-- Posted: March 14, 2002