Executor Fees

In 2004 I was the Executor of my Father's estate. Nothing big and all the tax returns were simple. My step-mother received all estate proceeds. However, I am now preparing my own 2004 tax return and I must claim the fiduciary fees I received from the estate as income. The money I received was comprised of basically 3 pieces:

1) Actual reimbursement for hotels and paperwork, 2) mileage at the .365 rate (my father lived out of state) and 3) my fee. (so many hours at x$ per hour). All was approved by the attorney and the courts. Publication 525 seems to indicate I need to claim as income the entire 3 portions but it does not give me any place to deduct the actual expenses. Common sense tells me I only have to claim the fee portion.

Any advice?

Thanks

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Reply to
Art's Antique Radios
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Common sense in tax law?

My best guess is that the total amount you receive must be included as miscellaneous income, and the part that constitutes expense (and mileage) reimbursement is deductible as a miscellaneous itemized deduction or as a miscellaneous adjustment to income. I haven't researched which -- I lean toward the latter

In the case of "paperwork" -- if the estate should have made the payment directly to a third party, and the payment did not benefit you (I'm trying to exclude your hotel bills here

-- perhaps others have a better wording?), then the fact you made the payment and were reimbursed by the estate should not have any tax consequences. I'm thinking of what would normally be considered office or mailing expenses, here.

Reply to
Arthur L. Rubin

Only the fee portion, on line 21. It's not subject to self-employment tax.

-- Tom Healy, CPA Boulder, CO Web:

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Reply to
Thomas Healy

Again, I don't do returns, so someone may come along with better information. But my guess would be that you could file a Schedule C, so that you would claim all you have received, but deduct your expenses. Stu

Reply to
Stuart A. Bronstein

You're right on the money. Only your fee goes on "other income" line of page of 1040. (line 20? 21? I never can remember. (grin)) ChEAr$, Harlan Lunsford, EA n LA Sat 12 Mar 2005

Reply to
Harlan Lunsford

The item you identify in #3 as "my fee" is reportable as taxable income on Line 21 of Form 1040. The other two items need not be reported as long as you accounted for the expense by submitting some paperwork to the estate that documented your expense and you were reimbursed for that expense. Items 1 and 2 would fall into the expense reimbursement category and not the taxable fee category.

-- Alan

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Reply to
A.G. Kalman

Use IRS Pub 559 as your reference, not 525 (unless you are in the business of being an executor.

REIMBURSEMENT of your actual, out-of-pocket, expenses and mileage is not taxable income. The executor fee is taxable income, reported on Line 21 of the 1040 form. If there is a business in the estate, you have to report the fee on Schedule C and SE, but that is rarely a concern.

Common sense wins. See above and Pub 559.

Reply to
Herb Smith

And thereby subject the "net profit" to self employment tax. For a professional exeuctor, this is how it's done, but for a one time non professional person it's not se income, there fore goes on line 21. ChEAr$, Harlan Lunsford, EA n LA Sun 13 Mar 2005

Reply to
Harlan Lunsford

thanks all

Reply to
Art's Antique Radios

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