ESTATE PLANNING: Tax filing deadlines

Q: Our mother died in November and we opened an estate. Our attorney is telling us that the tax return isn't due until August. Shouldn't the tax return be filed by April 15? What happens if we don't file the return until August?

A: Keep in mind that there are a lot of different kinds of taxes associated with a decedent and his or her estate. Because there are multiple types of taxes that can be imposed, there are a lot of different types of returns that may need to be filed.

Now for most of us, April 15 is the big day when it comes to taxes.

When a person dies, chances are pretty good that a final life return will need to be filed for the decedent by the April 15 deadline. Just like in life, Uncle Sam wants to know if there was any income that is subject to tax.

In addition, if an estate was opened, a fiduciary income tax may be required. If the estate earned more than $600 in taxable income, an IRS form 1041, fiduciary return, should be filed.

A 1041 might also be required if the decedent had a trust that became irrevocable when she died. A revocable living trust becomes a taxable entity when the settlor, or the surviving settlor in the case of a joint trust, dies. In the not-too-distant past, when there was a probate estate and a trust, we would often have to file a fiduciary return for the estate and one for the trust. Now, under certain circumstances, the trust and estate income can be reported on one return.

But none of this answers you question about why the estate would have until August to file its tax return. What I think your attorney is referring to is the Indiana Inheritance Tax Return and possibly the Federal Estate Tax Return.

When a person dies, an Indiana Inheritance Tax Return (IH–6) may have to be filed within nine months of the date of death. Ironically, although the return is required to be filed within nine months, the tax doesn't have to be paid until 12 months following death. However, if you pay estimated tax within nine months, you get a 5 percent discount so most attorneys try to get the return on file and the tax paid timely.

If I was a betting man, this is the tax return that your return is referring to. However, if you still have concerns, call the attorney at ask.

Opinions are solely the writer's. Christopher W. Yugo is an attorney in Crown Point Indiana. Address questions to Chris in care of The Times, 601 W. 45th Ave., Munster, Indiana 46321 or to Chrisyugolaw@gmail.com. Chris' information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant, or estate–planning specialist.