Jean A. Cordasco CPA – Estate tax planning

Our Certified Public Accountants are experts in helping our clients plan for Estate taxes. When the time comes, we know how to correctly and efficiently take care of your estate tax preparation. Let us help you!

Frequently Asked Questions about Estate and Trust Planning

What is a Trust?

A Trust is a legal fiduciary arrangement that allows you to set up your assets to be held and managed by a third party. The third-party, known as the Trustee, is responsible for ensuring that your estate is handled as agreed to by the legal arrangement. Trusts are not limited by size and can work for both the small and much larger taxpayers.

Are Estates and Trusts taxed?

Yes. There are two kinds of taxes owned by an estate: One on the transfer of assets from the decedent to their beneficiaries and heirs, known as the Estate tax. The other one is on income generated by the decedent’s estate assets, known as the income tax.

How does the taxation on an estate work?

When someone dies, their assets become the property of their estate. Any income those assets generate is also part of the estate and may require filing an estate income tax return. Examples of assets that would generate income to the decedent’s estate include savings accounts, CDs, stocks, bonds, mutual funds, and rental property. Form 1041, the U.S. Income Tax Return for Estates and Trusts, is required if the estate generates more than $600 in annual gross income.

What other taxes might an Estate have to file?

An estate must pay quarterly estimated income tax in the same manner as individuals.