October 20th, 2009 | 
Author: 
PersRep asked:
The IRS says “Any expense the estate has incurred only because of its estate status”. In the real world, the estate contains real estate, which has utility bills, insurance, taxes, etc. The IRS talks about stamps! The real estate is not a business, it’s my parents house.
Second, of course, the estate has medical bills and some payments from insurance companies. Do these cancel each other? The IRS says the medical bills go to the decedents Form 1040 and the payment from insurance companies go on the 1041. That means if the insurance company pays the medical provider directly, there are no taxes. But, if the insurance company pays the estate and the estate pays the provider, there could be a ton of taxes. What do they really mean? Thanks for any insight. PersRep
Dominic Kertis
The IRS says “Any expense the estate has incurred only because of its estate status”. In the real world, the estate contains real estate, which has utility bills, insurance, taxes, etc. The IRS talks about stamps! The real estate is not a business, it’s my parents house.
Second, of course, the estate has medical bills and some payments from insurance companies. Do these cancel each other? The IRS says the medical bills go to the decedents Form 1040 and the payment from insurance companies go on the 1041. That means if the insurance company pays the medical provider directly, there are no taxes. But, if the insurance company pays the estate and the estate pays the provider, there could be a ton of taxes. What do they really mean? Thanks for any insight. PersRep
Dominic Kertis
Posted in United States | 
Tags: Estate Tax, Income Tax Form, Insight, Insurance, Insurance Companies, Insurance Company, Parents, Stamps, Tax Form 1041, Taxes
An enrolled agent or cpa near you who specializes in estate tax work including 1041.
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