Friday, November 9, 2012

Fiduciary Tax Returns and the Personal Representative in Wisconsin

There is nothing certain about life except death and taxes.  And often the two go together.  Loosing a loved one is never easy, no matter how much time a family may have had to prepare.  Emotions run high, caregivers suffer exhaustion, paperwork swirls, life marches on, and some matters need to be addressed even though they are unpleasant.  I see this every day in my legal practice.  To the extent you can, do not overlook income tax matters for the loved one you have lost.

If a loved one has died and you are picking up the pieces and moving the paper work forward, there is one important thing many overlook -- income tax forms.  When empowered by a probate court in Wisconsin, the  Personal Representative has a duty to make sure a last income tax form is filed for the decedent.  And, of the decedent's estate earned more than $600 (current level, which may change in the future), then a fiduciary income tax return is likely due as well.  And that is why a CPA is a good friend to have.  When in doubt, seek advice from a licensed tax professional.  As I always say, it is less expensive to seek advice beforehand rather than pay an attorney to clean up a mess.

If you are struggling to get your mind around this issue, an example may help.

  • my father died on 9/18/2009;
  • in 2010 we had a responsibility to file a final individual income tax form for 1/1/09 - 9/18/09; and
  • had his estate generated more than $600 from 9/19/09 - 12/31/-09 OR in calendar year 2010, then a fiduciary income tax form for the estate would have been required.
Tax issues may linger, unnoticed for years.  But more likely than not, they will surface....along with penalties. To learn more about Wisconsin's requirements, try the Department of Revenue's web site.

Thanks for reading, and remember a blog post is not legal advice.  Please consult with an attorney in your state for information specific to your situation.

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