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Ask A CPA - Estate Tax

Estate Tax - Administration Expenses

Expenses of administering an estate can be deducted either from the gross estate in figuring the Federal Estate tax on Form 706 or from the Estate's gross income in figuring the estate's income tax on Form 1041. These expenses cannot be claimed for both estate tax and income tax purposes. Generally, this rule also applies to expenses incurred in the sale of property by an estate that is not considered a dealer. Administration expenses include the fees paid to the fiduciary for administering the estate. It also includes the accountant, attorney and tax-return preparer fees. Also, expenses incurred for the production or collection of taxable income and expenses incurred for the management, conservation, or maintenance of property held for the production of taxable income. It also can include any expenses in connection with the determination, collection, or refund of any tax.

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