What estate administration costs are tax deductible?
If you have been named an executor or are responsible for administering an estate, determining which costs may be tax deductible is no easy task. In fact, given how complicated the U.S. Tax Code may be, mistakes over deducting expenses are ripe to happen. Because of this, having an experienced estate administration attorney to guide you through the process is invaluable. But before hiring an attorney, it is helpful to have a basic understanding of what expenses can be deductible when administering an estate.
This post will cover some common expenses that are tax deductible.
Executor's Commissions - The person responsible for making sure that the estate is properly distributed and the expenses paid may be allowed a commission for their efforts. The commission must be based on the usually accepted standards for estates of similar size and character.
Attorney's Fees -When filing an estate tax return, the administrator may deduct fees for lawyers as long as the fees are in line with the size and character of the estate and the extent of the services rendered. Consideration may also be given to the skills and expertise of the firm (or lawyer) in determining fees.
Miscellaneous Administration Costs - Other deductible costs include court costs and fees, accountant's fees, fees incurred for appraisals, as well as costs for preserving and distributing property of the estate. Interests on loans acquired to pay estate taxes may be deductible as well.
The preceding is not legal advice. If you have questions about your specific situation, an experienced estate administration attorney can help.