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Tax ID for an estate


Dear Tax Talk,
My mother died recently and I am executor. I am told that I need to get a tax ID for her estate. How do I do this? Why not use her Social Security number? -- Chris

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Dear Chris,
When an individual dies, the assets that she owned individually pass automatically to an entity known as an estate for purposes of administration until the assets can be distributed in accordance with the will. The will is admitted to a probate court where the heirs, the decedent's creditors and other interested parties become part of the proceedings. The court will issue letters of administration to the executor for purposes of empowering the executor to take charge of the decedent's property. For example, if your mother had a bank account, you will need to present the bank with letters of administration to allow it to give you access to the funds.

Income earned by your mother prior to her passing should be reported on a final Form 1040 under her Social Security number.

But any income that the estate assets produce during administration of her estate will need to be reported on a separate tax return: Form 1041. You will need a separate tax identification number in order to file this return if you anticipate the income to exceed $600 in one year. You can apply online for a TIN by completing Form SS-4.

You should also file Form 56 with the Internal Revenue Service establishing your position as executor of the estate.

If your mother passed away in 2004 and left more than $1.5 million in assets, you'll also need to complete Form 706, Estate Tax Return. You should also read IRS Publication 559 for survivors and executors. Depending on the complexity of your mother's holdings, it may be advisable to get a CPA to prepare the tax returns and an estate attorney to handle the probate proceedings.

-- Posted: Oct. 12, 2004




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