2007 Workbook Chapter 6: Death of a Taxpayer
Federal Tax Forms ................................................... 189 Income in Respect of a Decedent (IRD).................. 194 Deductions in Respect of a Decedent ...................... 201 Inherited Property.................................................... 202 Trusts ......................................................................... 205 Special Issues ............................................................ 210

Corrections were made to this workbook through January of 2008. No subsequent modifications were made.

Tax professionals are frequently called on to guide fiduciaries through income tax complications resulting from the death of a taxpayer. While a tax preparer should never try to replace the estate attorney, there are services she can provide. This chapter gives an overview of what might be expected. When a taxpayer dies, the court appoints someone (a fiduciary) to handle the taxpayer’s estate. This fiduciary’s title can be executor, executrix, administrator, administratrix, or personal representative. The fiduciary has a responsibility to the decedent’s estate. Primarily, the fiduciary has the responsibility to follow the guidelines of the will and handle the assets of the estate for the best interests of the beneficiaries. Consequently, it is important for the fiduciary to have a basic understanding of various issues that arise when a taxpayer dies. The fiduciary completes a Form 56, Notice Concerning Fiduciary Relationship, and submits it to the IRS. This informs the IRS who to contact regarding income taxes and estate taxes for the decedent and the estate. When the fiduciary’s work is completed, he files another Form 56 to revoke the position.

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FEDERAL TAX FORMS
The tax practitioner must know which tax returns are due for the decedent. The following forms may be required.