Tax Preparation & Filing

Estate & Trust Tax

Form 1041 fiduciary returns, final personal returns and estate tax filings for executors, trustees and families.

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Overview

How BATS handles estate & trust tax

When someone passes away, or when a trust earns income, the executor or trustee takes on tax deadlines they may never have dealt with. We prepare the decedent's final return, the estate or trust income tax return and, when required, the estate tax return, and we work alongside your attorney.

We work with clients in all 50 states and Washington, D.C., so state-specific rules are covered whether you are in one state or several.

Who this is for

Executors and personal representatives of an estate
Trustees of revocable and irrevocable trusts
Beneficiaries who received a K-1 from an estate or trust
Families planning to pass on wealth or a business

What's included

Everything covered in this service

Decedent's final Form 1040

Fiduciary income tax return (Form 1041)

Beneficiary K-1 preparation

Estate tax return (Form 706) when required

Gift tax returns (Form 709)

Coordination with estate attorneys and financial advisors

Key IRS forms

The paperwork behind estate & trust tax

Key IRS forms
Form 1041	U.S. Income Tax Return for Estates and Trusts
Schedule K-1 (Form 1041)	Each beneficiary's share of income and deductions
Form 706	Estate (and generation-skipping transfer) tax return
Form 709	Gift tax return
Form 56	Notifies the IRS of a fiduciary relationship
Form 4810	Request for prompt assessment, which can shorten the IRS review period
Form SS-4	Application for the estate or trust's employer identification number

What we'll need from you

Have these ready and your first meeting goes much faster. Don't worry if something is missing; we'll help you find it.

Death certificate
Will and any trust documents
Date-of-death values for assets (statements and appraisals)
Estate or trust EIN confirmation
Income received after death (1099s)
Expenses paid by the estate, such as legal and funeral costs
Records of distributions to beneficiaries

Start with a consultation

The process

How it works, step by step

Inventory
We gather the assets, income and date-of-death values.
Determine filings
We confirm which returns are required and their deadlines.
Prepare and distribute
We prepare returns and beneficiary K-1s.
Close out
We help the executor wrap up final filings so the estate can close.

Why BATS

Why clients choose BATS for estate & trust tax

Reviewed line by line

Every return is checked against your documents and last year's return before it's filed.

Every state covered

Federal, state and local returns prepared together so nothing is missed or taxed twice.

Planning built in

We flag next year's savings opportunities while we prepare this year's return.

Help after filing

If the IRS or a state sends a letter about a return we prepared, we help you answer it.

Questions

Estate & Trust Tax FAQs

11 answers to the questions clients ask us most. Don't see yours? Ask us directly.

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Does every estate owe estate tax?

No. Federal estate tax applies only to estates above a high exemption amount, though some states have their own estate or inheritance taxes with lower thresholds.

When does a trust need to file Form 1041?

Generally when it has any taxable income or gross income of $600 or more during the year.

Who pays tax on trust income?

It depends on whether income is distributed. Distributed income is usually taxed to beneficiaries through their K-1s, and retained income is taxed to the trust.

Does an estate need its own EIN?

Yes. The executor needs an EIN to open estate bank accounts and file the estate's income tax return.

What is portability?

A surviving spouse can keep the deceased spouse's unused federal estate tax exemption by filing a timely Form 706, even when no estate tax is owed. It can save significant tax later.

Do beneficiaries pay income tax on an inheritance?

Generally not on the inheritance itself. Income the assets earn afterward is taxable, and inherited retirement accounts are taxed as money is withdrawn. A few states also charge inheritance tax.

What is a step-up in basis?

Inherited property generally takes a tax basis equal to its value on the date of death, which can greatly reduce capital gains tax when heirs sell.

Can an estate use a fiscal year?

Yes. Estates can choose a fiscal year, which can help with timing distributions and income. Most trusts must use a calendar year.

How much does tax preparation cost?

Fees depend on the forms involved, the number of states and how organised your records are. After a short consultation we give you a written quote before any work starts.

Is my information secure?

Yes. Documents are exchanged through an encrypted client portal, and we follow a written information security plan as the FTC Safeguards Rule requires of tax preparers.

Can you prepare returns for prior years?

Yes. We prepare current and past-year federal and state returns, which is useful if you are catching up or amending.

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