Estate & Trust Administration For Dummies, 2nd Edition

Chapter 22

Ten Types of Taxes You May Have to Pay

IN THIS CHAPTER

Making sense of the transfer-tax trio

Figuring out the difference between taxes on income and taxes on owned items

We’d love to be able to be able to tell you that negotiating your way through the tax implications of estates and trusts is an easy matter. Unfortunately, it can get pretty complicated because one event can often lead to multiple taxes being owed. Don’t ask us why. We don’t make the rules, but we’re stuck with ’em the same as you.

In this chapter, we give you the top-ten list of the taxes you may come across in the process of administering an estate or trust. Chances are good you won’t be responsible for paying all of them, but the odds are also good that you won’t avoid paying taxes altogether.

With the exception of federal income taxes and federal and state estate, gift, and inheritance taxes, all taxes you pay on behalf of the trust or estate are deductible on that entity’s income tax returns. Of course, you actually have to have paid the taxes in order to deduct. If the check is written but still sitting in the envelope waiting to be mailed on the last business day of any tax year, you can’t use ...