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Turbotax Amend

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Turbotax Amend

Turbotax amend Publication 559 - Main Content Table of Contents Personal RepresentativeDuties Fees Received by Personal Representatives Final Income Tax Return for Decedent—Form 1040Name, Address, and Signature When and Where To File Filing Requirements Income To Include Exemptions and Deductions Credits, Other Taxes, and Payments Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Filing Reminders Other Tax InformationTax Benefits for Survivors Income in Respect of a Decedent Deductions in Respect of a Decedent Estate Tax Deduction Gifts, Insurance, and Inheritances Other Items of Income Income Tax Return of an Estate— Form 1041Filing Requirements Income To Include Exemption and Deductions Credits, Tax, and Payments Name, Address, and Signature When and Where To File Distributions to BeneficiariesIncome That Must Be Distributed Currently Other Amounts Distributed Discharge of a Legal Obligation Character of Distributions How and When To Report Bequest Termination of Estate Estate and Gift TaxesApplicable Credit Amount Gift Tax Estate Tax Generation-Skipping Transfer Tax Comprehensive ExampleFinal Return for Decedent—Form 1040 Income Tax Return of an Estate—Form 1041 How To Get Tax HelpLow Income Taxpayer Clinics Personal Representative A personal representative of an estate is an executor, administrator, or anyone who is in charge of the decedent's property. Turbotax amend Generally, an executor (or executrix) is named in a decedent's will to administer the estate and distribute properties as the decedent has directed. Turbotax amend An administrator (or administratrix) is usually appointed by the court if no will exists, if no executor was named in the will, or if the named executor cannot or will not serve. Turbotax amend In general, an executor and an administrator perform the same duties and have the same responsibilities. Turbotax amend For estate tax purposes, if there is no executor or administrator appointed, qualified, and acting within the United States, the term “executor” includes anyone in actual or constructive possession of any property of the decedent. Turbotax amend It includes, among others, the decedent's agents and representatives; safe-deposit companies, warehouse companies, and other custodians of property in this country; brokers holding securities of the decedent as collateral; and the debtors of the decedent who are in this country. Turbotax amend Duties The primary duties of a personal representative are to collect all the decedent's assets, pay his or her creditors, and distribute the remaining assets to the heirs or other beneficiaries. Turbotax amend The personal representative also must perform the following duties. Turbotax amend Apply for an employer identification number (EIN) for the estate. Turbotax amend File all tax returns, including income, estate and gift tax returns, when due. Turbotax amend Pay the tax determined up to the date of discharge from duties. Turbotax amend Other duties of the personal representative in federal tax matters are discussed in other sections of this publication. Turbotax amend If any beneficiary is a nonresident alien, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for information on the personal representative's duties as a withholding agent. Turbotax amend Penalty. Turbotax amend   There is a penalty for failure to file a tax return when due unless the failure is due to reasonable cause. Turbotax amend Reliance on an agent (attorney, accountant, etc. Turbotax amend ) is not reasonable cause for late filing. Turbotax amend It is the personal representative's duty to file the returns for the decedent and the estate when due. Turbotax amend Identification number. Turbotax amend   The first action you should take if you are the personal representative for the decedent is to apply for an EIN for the estate. Turbotax amend You should apply for this number as soon as possible because you need to enter it on returns, statements, and other documents you file concerning the estate. Turbotax amend You also must give the number to payers of interest and dividends and other payers who must file a return concerning the estate. Turbotax amend   You can get an EIN by applying online at www. Turbotax amend irs. Turbotax amend gov (click on "Apply for an EIN Online" under the Tools heading). Turbotax amend Generally, if you apply online, you will receive your EIN immediately upon completing the application. Turbotax amend You can also apply using Form SS-4, Application for Employer Identification Number. Turbotax amend Generally, if you apply by mail, it takes about 4 weeks to get your EIN. Turbotax amend See the form instructions for other ways to apply. Turbotax amend   Payers of interest and dividends report amounts on Forms 1099 using the identification number of the person to whom the account is payable. Turbotax amend After a decedent's death, Forms 1099 must reflect the identification number of the estate or beneficiary to whom the amounts are payable. Turbotax amend As the personal representative handling the estate, you must furnish this identification number to the payer. Turbotax amend For example, if interest is payable to the estate, the estate's EIN must be provided to the payer and used to report the interest on Form 1099-INT, Interest Income. Turbotax amend If the interest is payable to a surviving joint owner, the survivor's identification number, such as an SSN or ITIN, must be provided to the payer and used to report the interest. Turbotax amend   If the estate or a survivor may receive interest or dividends after you inform the payer of the decedent's death, the payer should give you (or the survivor) a Form W-9, Request for Taxpayer Identification Number and Certification (or a similar substitute form). Turbotax amend Complete this form to inform the payer of the estate's (or if completed by the survivor, the survivor's) identification number and return it to the payer. Turbotax amend    Do not use the deceased individual's identifying number to file an individual income tax return after the decedent's final tax return. Turbotax amend Also do not use it to make estimated tax payments for a tax year after the year of death. Turbotax amend Penalty. Turbotax amend   If you do not include the EIN or the taxpayer identification number of another person where it is required on a return, statement, or other document, you are liable for a penalty for each failure, unless you can show reasonable cause. Turbotax amend You also are liable for a penalty if you do not give the taxpayer identification number of another person when required on a return, statement, or other document. Turbotax amend Notice of fiduciary relationship. Turbotax amend   The term fiduciary means any person acting for another person. Turbotax amend It applies to persons who have positions of trust on behalf of others. Turbotax amend A personal representative for a decedent's estate is a fiduciary. Turbotax amend Form 56. Turbotax amend   If you are appointed to act in a fiduciary capacity for another, you must file a written notice with the IRS stating this. Turbotax amend Form 56, Notice Concerning Fiduciary Relationship, is used for this purpose. Turbotax amend See the Instructions for Form 56 for filing requirements and other information. Turbotax amend   File Form 56 as soon as all the necessary information (including the EIN) is available. Turbotax amend It notifies the IRS that you, as the fiduciary, are assuming the powers, rights, duties, and privileges of the decedent. Turbotax amend The notice remains in effect until you notify the IRS (by filing another Form 56) that your fiduciary relationship with the estate has terminated. Turbotax amend Termination of fiduciary relationship. Turbotax amend   Form 56 should also be filed to notify the IRS if your fiduciary relationship is terminated or when a successor fiduciary is appointed if the estate has not been terminated. Turbotax amend See Form 56 and its instructions for more information. Turbotax amend   At the time of termination of the fiduciary relationship, you may want to file Form 4810, Request for Prompt Assessment Under Internal Revenue Code Section 6501(d), and Form 5495, Request for Discharge From Personal Liability Under Internal Revenue Code Section 2204 or 6905, to wind up your duties as fiduciary. Turbotax amend See below for a discussion of these forms. Turbotax amend Request for prompt assessment (charge) of tax. Turbotax amend   The IRS ordinarily has 3 years from the date an income tax return is filed, or its due date, whichever is later, to charge any additional tax due. Turbotax amend However, as a personal representative, you may request a prompt assessment of tax after the return has been filed. Turbotax amend This reduces the time for making the assessment to 18 months from the date the written request for prompt assessment was received. Turbotax amend This request can be made for any tax return (except the estate tax return) of the decedent or the decedent's estate. Turbotax amend This may permit a quicker settlement of the tax liability of the estate and an earlier final distribution of the assets to the beneficiaries. Turbotax amend Form 4810. Turbotax amend   Form 4810 can be used for making this request. Turbotax amend It must be filed separately from any other document. Turbotax amend   As the personal representative for the decedent's estate, you are responsible for any additional taxes that may be due. Turbotax amend You can request prompt assessment of any of the decedent's taxes (other than federal estate taxes) for any years for which the statutory period for assessment is open. Turbotax amend This applies even though the returns were filed before the decedent's death. Turbotax amend Failure to report income. Turbotax amend   If you or the decedent failed to report substantial amounts of gross income (more than 25% of the gross income reported on the return) or filed a false or fraudulent return, your request for prompt assessment will not shorten the period during which the IRS may assess the additional tax. Turbotax amend However, such a request may relieve you of personal liability for the tax if you did not have knowledge of the unpaid tax. Turbotax amend Request for discharge from personal liability for tax. Turbotax amend   An executor can make a request for discharge from personal liability for a decedent's income, gift, and estate taxes. Turbotax amend The request must be made after the returns for those taxes are filed. Turbotax amend To make the request, file Form 5495. Turbotax amend For this purpose, an executor is an executor or administrator that is appointed, qualified, and acting within the United States. Turbotax amend   Within 9 months after receipt of the request, the IRS will notify the executor of the amount of taxes due. Turbotax amend If this amount is paid, the executor will be discharged from personal liability for any future deficiencies. Turbotax amend If the IRS has not notified the executor, he or she will be discharged from personal liability at the end of the 9-month period. Turbotax amend    Even if the executor is discharged from personal liability, the IRS will still be able to assess tax deficiencies against the executor to the extent he or she still has any of the decedent's property. Turbotax amend Insolvent estate. Turbotax amend   Generally, if a decedent's estate is insufficient to pay all the decedent's debts, the debts due to the United States must be paid first. Turbotax amend Both the decedent's federal income tax liabilities at the time of death and the estate's income tax liability are debts due to the United States. Turbotax amend The personal representative of an insolvent estate is personally responsible for any tax liability of the decedent or of the estate if he or she had notice of such tax obligations or failed to exercise due care in determining if such obligations existed before distribution of the estate's assets and before being discharged from duties. Turbotax amend The extent of such personal responsibility is the amount of any other payments made before paying the debts due to the United States, except where such other debt paid has priority over the debts due to the United States. Turbotax amend Income tax liabilities need not be formally assessed for the personal representative to be liable if he or she was aware or should have been aware of their existence. Turbotax amend Fees Received by Personal Representatives All personal representatives must include fees paid to them from an estate in their gross income. Turbotax amend If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on your Form 1040, line 21. Turbotax amend If you are in the trade or business of being an executor, report fees received from the estate as self-employment income on Schedule C or Schedule C-EZ of your Form 1040. Turbotax amend If the estate operates a trade or business and you, as executor, actively participate in the trade or business while fulfilling your duties, any fees you receive related to the operation of the trade or business must be reported as self-employment income on Schedule C (or Schedule C-EZ) of your Form 1040. Turbotax amend Final Income Tax Return for Decedent—Form 1040 The personal representative (defined earlier) must file the final income tax return (Form 1040) of the decedent for the year of death and any returns not filed for preceding years. Turbotax amend A surviving spouse, under certain circumstances, may have to file the returns for the decedent. Turbotax amend See Joint Return, later. Turbotax amend Return for preceding year. Turbotax amend   If an individual died after the close of the tax year, but before the return for that year was filed, the return for the year just closed will not be the final return. Turbotax amend The return for that year will be a regular return and the personal representative must file it. Turbotax amend Example. Turbotax amend Samantha Smith died on March 21, 2013, before filing her 2012 tax return. Turbotax amend Her personal representative must file her 2012 return by April 15, 2013. Turbotax amend Her final tax return covering the period from January 1, 2013, to March 20, 2013, is due April 15, 2014. Turbotax amend Name, Address, and Signature Write the word “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Turbotax amend If filing a joint return, write the name and address of the decedent and the surviving spouse in the name and address fields. Turbotax amend If a joint return is not being filed, write the decedent's name in the name field and the personal representative's name and address in the address field. Turbotax amend Third party designee. Turbotax amend   You can check the “Yes” box in the Third Party Designee area on page 2 of the return to authorize the IRS to discuss the return with a friend, family member, or any other person you choose. Turbotax amend This allows the IRS to call the person you identified as the designee to answer any questions that may arise during the processing of the return. Turbotax amend It also allows the designee to perform certain actions. Turbotax amend See the Instructions for Form 1040 for details. Turbotax amend Signature. Turbotax amend   If a personal representative has been appointed, that person must sign the return. Turbotax amend If it is a joint return, the surviving spouse must also sign it. Turbotax amend If no personal representative has been appointed, the surviving spouse (on a joint return) signs the return and writes in the signature area “Filing as surviving spouse. Turbotax amend ” If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Turbotax amend ” Paid preparer. Turbotax amend   If you pay someone to prepare, assist in preparing, or review the tax return, that person must sign the return and fill in the other blanks in the Paid Preparer Use Only area of the return. Turbotax amend See the Form 1040 instructions for details. Turbotax amend When and Where To File The final income tax return is due at the same time the decedent's return would have been due had death not occurred. Turbotax amend A final return for a decedent who was a calendar year taxpayer is generally due on April 15 following the year of death, regardless of when during that year death occurred. Turbotax amend However, when the due date falls on a Saturday, Sunday, or legal holiday, the return is filed timely if filed by the next business day. Turbotax amend The tax return must be prepared for the year of death regardless of when during the year death occurred. Turbotax amend Generally, you must file the final income tax return of the decedent with the Internal Revenue Service Center for the place where you live. Turbotax amend A tax return for a decedent can be electronically filed. Turbotax amend A personal representative may also obtain an income tax filing extension on behalf of a decedent. Turbotax amend Filing Requirements The gross income, age, and filing status of a decedent generally determine whether a return must be filed. Turbotax amend Gross income is all income received by an individual from any source in the form of money, goods, property, and services that is not tax-exempt. Turbotax amend It includes gross receipts from self-employment, but if the business involves manufacturing, merchandising, or mining, subtract any cost of goods sold. Turbotax amend In general, filing status depends on whether the decedent was considered single or married at the time of death. Turbotax amend See the income tax return instructions or Publication 501, Exemptions, Standard Deduction, and Filing Information. Turbotax amend Refund A return must be filed to obtain a refund if tax was withheld from salaries, wages, pensions, or annuities, or if estimated tax was paid, even if a return is not otherwise required to be filed. Turbotax amend Also, the decedent may be entitled to other credits that result in a refund. Turbotax amend These advance payments of tax and credits are discussed later under Credits, Other Taxes, and Payments. Turbotax amend Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. Turbotax amend   Form 1310 does not have to be filed if you are claiming a refund and you are: A surviving spouse filing an original or amended joint return with the decedent, or A court-appointed or certified personal representative filing the decedent’s original return and a copy of the court certificate showing your appointment is attached to the return. Turbotax amend   If the personal representative is filing a claim for refund on Form 1040X, Amended U. Turbotax amend S. Turbotax amend Individual Income Tax Return, or Form 843, Claim for Refund and Request for Abatement, and the court certificate has already been filed with the IRS, attach Form 1310 and write “Certificate Previously Filed” at the bottom of the form. Turbotax amend Example. Turbotax amend Edward Green died before filing his tax return. Turbotax amend You were appointed the personal representative for Edward's estate, and you file his Form 1040 showing a refund due. Turbotax amend You do not need Form 1310 to claim the refund if you attach a copy of the court certificate showing you were appointed the personal representative. Turbotax amend    If you are a surviving spouse and you receive a tax refund check in both your name and your deceased spouse's name, you can have the check reissued in your name alone. Turbotax amend Return the joint-name check marked “VOID” to your local IRS office or the service center where you mailed your return, along with a written request for reissuance of the refund check. Turbotax amend A new check will be issued in your name and mailed to you. Turbotax amend Death certificate. Turbotax amend   When filing the decedent's final income tax return, do not attach the death certificate or other proof of death to the final return. Turbotax amend Instead, keep it for your records and provide it if requested. Turbotax amend Nonresident Alien If the decedent was a nonresident alien who would have had to file Form 1040NR, U. Turbotax amend S. Turbotax amend Nonresident Alien Income Tax Return, you must file that form for the decedent's final tax year. Turbotax amend See the Instructions for Form 1040NR for the filing requirements, due date, and where to file. Turbotax amend Joint Return Generally, the personal representative and the surviving spouse can file a joint return for the decedent and the surviving spouse. Turbotax amend However, the surviving spouse alone can file the joint return if no personal representative has been appointed before the due date for filing the final joint return for the year of death. Turbotax amend This also applies to the return for the preceding year if the decedent died after the close of the preceding tax year and before filing the return for that year. Turbotax amend The income of the decedent that was includible on his or her return for the year up to the date of death (see Income To Include, later) and the income of the surviving spouse for the entire year must be included in the final joint return. Turbotax amend A final joint return with the decedent cannot be filed if the surviving spouse remarried before the end of the year of the decedent's death. Turbotax amend The filing status of the decedent in this instance is married filing a separate return. Turbotax amend For information about tax benefits to which a surviving spouse may be entitled, see Tax Benefits for Survivors, later, under Other Tax Information. Turbotax amend Personal representative may revoke joint return election. Turbotax amend   A court-appointed personal representative may revoke an election to file a joint return previously made by the surviving spouse alone. Turbotax amend This is done by filing a separate return for the decedent within one year from the due date of the return (including any extensions). Turbotax amend The joint return made by the surviving spouse will then be regarded as the separate return of that spouse by excluding the decedent's items and refiguring the tax liability. Turbotax amend Relief from joint liability. Turbotax amend   In some cases, one spouse may be relieved of joint liability for tax, interest, and penalties on a joint return for items of the other spouse that were incorrectly reported on the joint return. Turbotax amend If the decedent qualified for this relief while alive, the personal representative can pursue an existing request, or file a request, for relief from joint liability. Turbotax amend For information on requesting this relief, see Publication 971, Innocent Spouse Relief. Turbotax amend Income To Include The decedent's income includible on the final return is generally determined as if the person were still alive except that the taxable period is usually shorter because it ends on the date of death. Turbotax amend The method of accounting regularly used by the decedent before death also determines the income includible on the final return. Turbotax amend This section explains how some types of income are reported on the final return. Turbotax amend For more information about accounting methods, see Publication 538, Accounting Periods and Methods. Turbotax amend Cash Method If the decedent accounted for income under the cash method, only those items actually or constructively received before death are included on the final return. Turbotax amend Constructive receipt of income. Turbotax amend   Interest from coupons on the decedent's bonds is constructively received by the decedent if the coupons matured in the decedent's final tax year, but had not been cashed. Turbotax amend Include the interest income on the final return. Turbotax amend   Generally, a dividend is considered constructively received if it was available for use by the decedent without restriction. Turbotax amend If the corporation customarily mailed its dividend checks, the dividend was includible when received. Turbotax amend If the individual died between the time the dividend was declared and the time it was received in the mail, the decedent did not constructively receive it before death. Turbotax amend Do not include the dividend in the final return. Turbotax amend Accrual Method Generally, under an accrual method of accounting, income is reported when earned. Turbotax amend If the decedent used an accrual method, only the income items normally accrued before death are included on the final return. Turbotax amend Interest and Dividend Income (Forms 1099) Form(s) 1099 reporting interest and dividends earned by the decedent before death should be received and the amounts included on the decedent's final return. Turbotax amend A separate Form 1099 should show the interest and dividends earned after the date of the decedent's death and paid to the estate or other recipient that must include those amounts on its return. Turbotax amend You can request corrected Forms 1099 if these forms do not properly reflect the right recipient or amounts. Turbotax amend For example, a Form 1099-INT, reporting interest payable to the decedent, may include income that should be reported on the final income tax return of the decedent, as well as income that the estate or other recipient should report, either as income earned after death or as income in respect of the decedent (discussed later). Turbotax amend For income earned after death, you should ask the payer for a Form 1099 that properly identifies the recipient (by name and identification number) and the proper amount. Turbotax amend If that is not possible, or if the form includes an amount that represents income in respect of the decedent, report the interest as shown next under How to report. Turbotax amend See U. Turbotax amend S. Turbotax amend savings bonds acquired from decedent under Income in Respect of a Decedent, later, for information on savings bond interest that may have to be reported on the final return. Turbotax amend How to report. Turbotax amend   If you are preparing the decedent's final return and you have received a Form 1099-INT for the decedent that includes amounts belonging to the decedent and to another recipient (the decedent's estate or another beneficiary), report the total interest shown on Form 1099-INT on Schedule B (Form 1040A or 1040), Interest and Ordinary Dividends. Turbotax amend Next, enter a subtotal of the interest shown on Forms 1099, and the interest reportable from other sources for which you did not receive Forms 1099. Turbotax amend Then, show any interest (including any interest you receive as a nominee) belonging to another recipient separately and subtract it from the subtotal. Turbotax amend Identify the amount of this adjustment as “Nominee Distribution” or other appropriate designation. Turbotax amend   Report dividend income for which you received a Form 1099-DIV, Dividends and Distributions, on the appropriate schedule using the same procedure. Turbotax amend    Note. Turbotax amend If the decedent received amounts as a nominee, you must give the actual owner a Form 1099, unless the owner is the decedent's spouse. Turbotax amend See General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G) for more information on filing Forms 1099. Turbotax amend Partnership Income The death of a partner closes the partnership's tax year for that partner. Turbotax amend Generally, it does not close the partnership's tax year for the remaining partners. Turbotax amend The decedent's distributive share of partnership items must be figured as if the partnership's tax year ended on the date the partner died. Turbotax amend To avoid an interim closing of the partnership books, the partners can agree to estimate the decedent's distributive share by prorating the amounts the partner would have included for the entire partnership tax year. Turbotax amend On the decedent's final return, include the decedent's distributive share of partnership items for the following periods. Turbotax amend The partnership's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Turbotax amend The period, if any, from the end of the partnership's tax year in (1) to the decedent's date of death. Turbotax amend Example. Turbotax amend Mary Smith was a partner in XYZ partnership and reported her income on a tax year ending December 31. Turbotax amend The partnership uses a tax year ending June 30. Turbotax amend Mary died August 31, 2013, and her estate established its tax year through August 31. Turbotax amend The distributive share of partnership items based on the decedent's partnership interest is reported as follows. Turbotax amend Final Return for the Decedent—January 1 through August 31, 2013, includes XYZ partnership items from (a) the partnership tax year ending June 30, 2013, and (b) the partnership tax year beginning July 1, 2013, and ending August 31, 2013 (the date of death). Turbotax amend Income Tax Return of the Estate—September 1, 2013, through August 31, 2014, includes XYZ partnership items for the period September 1, 2013, through June 30, 2014. Turbotax amend S Corporation Income If the decedent was a shareholder in an S corporation, include on the final return the decedent's share of the S corporation's items of income, loss, deduction, and credit for the following periods. Turbotax amend The corporation's tax year that ended within or with the decedent's final tax year (the year ending on the date of death). Turbotax amend The period, if any, from the end of the corporation's tax year in (1) to the decedent's date of death. Turbotax amend Self-Employment Income Include self-employment income actually or constructively received or accrued, depending on the decedent's accounting method. Turbotax amend For self-employment tax purposes only, the decedent's self-employment income will include the decedent's distributive share of a partnership's income or loss through the end of the month in which death occurred. Turbotax amend For this purpose, the partnership's income or loss is considered to be earned ratably over the partnership's tax year. Turbotax amend Community Income If the decedent was married and domiciled in a community property state, half of the income received and half of the expenses paid during the decedent's tax year by either the decedent or spouse may be considered to be the income and expenses of the other. Turbotax amend For more information, see Publication 555, Community Property. Turbotax amend HSA, Archer MSA, or Medicare Advantage MSA The treatment of an HSA (health savings account), an Archer MSA (medical savings account), or a Medicare Advantage MSA at the death of the account holder, depends on who acquires the interest in the account. Turbotax amend If the decedent's estate acquires the interest, the fair market value (FMV) of the assets in the account on the date of death is included in income on the decedent's final return. Turbotax amend The estate tax deduction, discussed later, does not apply to this amount. Turbotax amend If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Turbotax amend For other information on HSAs, Archer MSAs, or Medicare Advantage MSAs, see Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans. Turbotax amend Coverdell Education Savings Account (ESA) Generally, the balance in a Coverdell ESA must be distributed within 30 days after the individual for whom the account was established reaches age 30, or dies, whichever is earlier. Turbotax amend The treatment of the Coverdell ESA at the death of an individual under age 30 depends on who acquires the interest in the account. Turbotax amend If the decedent's estate acquires the interest, the earnings on the account must be included on the final income tax return of the decedent. Turbotax amend The estate tax deduction, discussed later, does not apply to this amount. Turbotax amend If a beneficiary acquires the interest, see the discussion under Income in Respect of a Decedent, later. Turbotax amend The age 30 limitation does not apply if the individual for whom the account was established or the beneficiary that acquires the account is an individual with special needs. Turbotax amend This includes an individual who, because of a physical, mental, or emotional condition (including a learning disability), requires additional time to complete his or her education. Turbotax amend For more information on Coverdell ESAs, see Publication 970, Tax Benefits for Education. Turbotax amend Accelerated Death Benefits Accelerated death benefits are amounts received under a life insurance contract before the death of the insured individual. Turbotax amend These benefits also include amounts received on the sale or assignment of the contract to a viatical settlement provider. Turbotax amend Generally, if the decedent received accelerated death benefits on the life of a terminally or chronically ill individual, whether on his or her own life or on the life of another person, those benefits are not included in the decedent's income. Turbotax amend For more information, see the discussion under Gifts, Insurance, and Inheritances under Other Tax Information, later. Turbotax amend Exemptions and Deductions Generally, the rules for exemptions and deductions allowed to an individual also apply to the decedent's final income tax return. Turbotax amend Show on the final return deductible items the decedent paid (or accrued, if the decedent reported deductions on an accrual method) before death. Turbotax amend This section contains a detailed discussion of medical expenses because the tax treatment of the decedent's medical expenses can be different. Turbotax amend See Medical Expenses, later. Turbotax amend Exemptions You can claim the decedent's personal exemption on the final income tax return. Turbotax amend If the decedent was another person's dependent (for example, a parent's), you cannot claim the personal exemption on the decedent's final return. Turbotax amend Standard Deduction If you do not itemize deductions on the final return, the full amount of the appropriate standard deduction is allowed regardless of the date of death. Turbotax amend For information on the appropriate standard deduction, see the Form 1040 income tax return instructions or Publication 501. Turbotax amend Medical Expenses Medical expenses paid before death by the decedent are deductible, subject to limits, on the final income tax return if deductions are itemized. Turbotax amend This includes expenses for the decedent, as well as for the decedent's spouse and dependents. Turbotax amend Beginning in 2013, medical expenses exceeding 10% of adjusted gross income (AGI) may be deducted, unless the decedent or their spouse is age 65 or older. Turbotax amend In that case medical expenses exceeding 7. Turbotax amend 5% of AGI may be deducted. Turbotax amend Qualified medical expenses are not deductible if paid with a tax-free distribution from an HSA or an Archer MSA. Turbotax amend Election for decedent's expenses. Turbotax amend   Medical expenses not paid before death are liabilities of the estate and are shown on the federal estate tax return (Form 706). Turbotax amend However, if medical expenses for the decedent are paid out of the estate during the 1-year period beginning with the day after death, you can elect to treat all or part of the expenses as paid by the decedent at the time they were incurred. Turbotax amend   If you make the election, you can claim all or part of the expenses on the decedent's income tax return (if deductions are itemized) rather than on the federal estate tax return (Form 706). Turbotax amend You can deduct expenses incurred in the year of death on the final income tax return. Turbotax amend You should file an amended return (Form 1040X) for medical expenses incurred in an earlier year, unless the statutory period for filing a claim for that year has expired. Turbotax amend   The amount you can deduct on the income tax return is the amount above 10% of adjusted gross income (or 7. Turbotax amend 5% of adjusted gross income if the decedent or the decedent's spouse was born before January 2, 1949). Turbotax amend Amounts not deductible because of this percentage cannot be claimed on the federal estate tax return. Turbotax amend Making the election. Turbotax amend   You make the election by attaching a statement, in duplicate, to the decedent's income tax return or amended return. Turbotax amend The statement must state that you have not claimed the amount as an estate tax deduction, and that the estate waives the right to claim the amount as a deduction. Turbotax amend This election applies only to expenses incurred for the decedent, not to expenses incurred to provide medical care for dependents. Turbotax amend Example. Turbotax amend Richard Brown used the cash method of accounting and filed his income tax return on a calendar year basis. Turbotax amend Richard died on June 1, 2013, at the age of 78, after incurring $800 in medical expenses. Turbotax amend Of that amount, $500 was incurred in 2012 and $300 was incurred in 2013. Turbotax amend Richard itemized his deductions when he filed his 2012 income tax return. Turbotax amend The personal representative of the estate paid the entire $800 liability in August 2013. Turbotax amend The personal representative may file an amended return (Form 1040X) for 2012 claiming the $500 medical expense as a deduction, subject to the 7. Turbotax amend 5% limit. Turbotax amend The $300 of expenses incurred in 2013 can be deducted on the final income tax return if deductions are itemized, subject to the 7. Turbotax amend 5% limit. Turbotax amend The personal representative must file a statement in duplicate with each return stating that these amounts have not been claimed on the federal estate tax return (Form 706), and waiving the right to claim such a deduction on Form 706 in the future. Turbotax amend Medical expenses not paid by estate. Turbotax amend   If you paid medical expenses for your deceased spouse or dependent, claim the expenses on your tax return for the year in which you paid them, whether they are paid before or after the decedent's death. Turbotax amend If the decedent was a child of divorced or separated parents, the medical expenses can usually be claimed by both the custodial and noncustodial parent to the extent paid by that parent during the year. Turbotax amend Insurance reimbursements. Turbotax amend   Insurance reimbursements of previously deducted medical expenses due a decedent at the time of death and later received by the decedent's estate are includible in the income tax return of the estate (Form 1041) for the year the reimbursements are received. Turbotax amend The reimbursements are also includible in the decedent's gross estate. Turbotax amend No deduction for funeral expenses can be taken on the final Form 1040 of a decedent. Turbotax amend These expenses may be deductible for estate tax purposes on Form 706. Turbotax amend Deduction for Losses A decedent's net operating loss deduction from a prior year and any capital losses (including capital loss carryovers) can be deducted only on the decedent's final income tax return. Turbotax amend A net operating loss on the decedent's final income tax return can be carried back to prior years. Turbotax amend (See Publication 536, Net Operating Losses (NOLs) for Individuals, Estates, and Trusts. Turbotax amend ) You cannot deduct any unused net operating loss or capital loss on the estate's income tax return. Turbotax amend At-risk loss limits. Turbotax amend   Special at-risk rules apply to most activities that are engaged in as a trade or business or for the production of income. Turbotax amend   These rules limit the deductible loss to the amount which the individual was considered at-risk in the activity. Turbotax amend An individual generally will be considered at-risk to the extent of the money and the adjusted basis of property that he or she contributed to the activity and certain amounts the individual borrowed for use in the activity. Turbotax amend An individual will be considered at-risk for amounts borrowed only if he or she was personally liable for the repayment or if the amounts borrowed were secured by property other than that used in the activity. Turbotax amend The individual is not considered at-risk for borrowed amounts if the lender has an interest in the activity or if the lender is related to a person who has an interest in the activity. Turbotax amend For more information, see Publication 925, Passive Activity and At-Risk Rules. Turbotax amend Passive activity rules. Turbotax amend   A passive activity is any trade or business activity in which the taxpayer does not materially participate. Turbotax amend To determine material participation, see Publication 925. Turbotax amend Rental activities are passive activities regardless of the taxpayer's participation, unless the taxpayer meets certain eligibility requirements. Turbotax amend   Individuals, estates, and trusts can offset passive activity losses only against passive activity income. Turbotax amend Passive activity losses or credits not allowed in one tax year can be carried forward to the next year. Turbotax amend   If a passive activity interest is transferred because a taxpayer dies, the accumulated unused passive activity losses are allowed as a deduction against the decedent's income in the year of death. Turbotax amend Losses are allowed only to the extent they are greater than the excess of the transferee's (recipient of the interest transferred) basis in the property over the decedent's adjusted basis in the property immediately before death. Turbotax amend The part of the accumulated losses equal to the excess is not allowed as a deduction for any tax year. Turbotax amend   Use Form 8582, Passive Activity Loss Limitations, to summarize losses and income from passive activities and to figure the amounts allowed. Turbotax amend For more information, see Publication 925. Turbotax amend Credits, Other Taxes, and Payments Discussed below are some of the tax credits, types of taxes that may be owed, income tax withheld, and estimated tax payments reported on the final return of a decedent. Turbotax amend Credits On the final income tax return, you can claim any tax credits that applied to the decedent before death. Turbotax amend Some of these credits are discussed next. Turbotax amend Earned income credit. Turbotax amend   If the decedent was an eligible individual, you can claim the earned income credit on the decedent's final return even though the return covers less than 12 months. Turbotax amend If the allowable credit is more than the tax liability for the year, the excess is refunded. Turbotax amend   For more information, see Publication 596, Earned Income Credit (EIC). Turbotax amend Credit for the elderly or the disabled. Turbotax amend   This credit is allowable on a decedent's final income tax return if the decedent met both of the following requirements in the year of death. Turbotax amend The decedent: Was a “qualified individual,” and Had income (adjusted gross income (AGI) and nontaxable social security and pensions) less than certain limits. Turbotax amend   For details on qualifying for or figuring the credit, see Publication 524, Credit for the Elderly or the Disabled. Turbotax amend Child tax credit. Turbotax amend   If the decedent had a qualifying child, you may be able to claim the child tax credit on the decedent's final return even though the return covers less than 12 months. Turbotax amend You may be able to claim the additional child tax credit and get a refund if the credit is more than the decedent's liability. Turbotax amend For more information, see the Instructions for Form 1040. Turbotax amend Adoption credit. Turbotax amend   Depending upon when the adoption was finalized, this credit may be taken on a decedent's final income tax return if the decedent: Adopted an eligible child and paid qualified adoption expenses, or Has a carryforward of an adoption credit from a prior year. Turbotax amend   Also, if the decedent is survived by a spouse who meets the filing status of qualifying widow(er), unused adoption credit may be carried forward and used following the death of the decedent. Turbotax amend See Form 8839, Qualified Adoption Expenses, and its instructions for more details. Turbotax amend General business tax credit. Turbotax amend   The general business credit available to a taxpayer is limited. Turbotax amend Any credit arising in a tax year beginning before 1998 that has not been used up can be carried forward for up to 15 years. Turbotax amend Any unused credit arising in a tax year beginning after 1997 has a 1-year carryback and a 20-year carryforward period. Turbotax amend   After the carryforward period, a deduction may be allowed for any unused business credit. Turbotax amend If the taxpayer dies before the end of the carryforward period, the deduction generally is allowed in the year of death. Turbotax amend   For more information on the general business credit, see Publication 334, Tax Guide for Small Business. Turbotax amend Other Taxes Taxes other than income tax that may be owed on the final return of a decedent include self-employment tax and alternative minimum tax, which are reported on Form 1040. Turbotax amend Self-employment tax. Turbotax amend   Self-employment tax may be owed on the final return if either of the following applied to the decedent in the year of death: Net earnings from self-employment (excluding income described in (2)) were $400 or more; or Wages from services performed as a church employee were $108. Turbotax amend 28 or more. Turbotax amend Alternative minimum tax (AMT). Turbotax amend   The tax laws give special treatment to certain types of income and allow special deductions and credits for certain types of expenses. Turbotax amend The alternative minimum tax (AMT) was enacted so taxpayers who benefit from these laws still pay at least a minimum amount of tax. Turbotax amend In general, the AMT is the excess of the tentative minimum tax over the regular tax shown on the return. Turbotax amend Form 6251. Turbotax amend    Use Form 6251, Alternative Minimum Tax—Individuals, to determine if this tax applies to the decedent. Turbotax amend See the form instructions for information on when you must attach Form 6251 to Form 1040. Turbotax amend Form 8801. Turbotax amend   If the decedent paid AMT in a previous year or had a credit carryforward, the decedent may be eligible for a minimum tax credit. Turbotax amend See Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts. Turbotax amend Payments of Tax The income tax withheld from the decedent's salary, wages, pensions, or annuities, and the amount paid as estimated tax are credits (advance payments of tax) that must be claimed on the final return. Turbotax amend Tax Forgiveness for Armed Forces Members, Victims of Terrorism, and Astronauts Income tax liability may be forgiven for a decedent who dies due to service in a combat zone, due to military or terrorist actions, as a result of a terrorist attack, or while serving in the line of duty as an astronaut. Turbotax amend Combat Zone If a member of the Armed Forces of the United States dies while in active service in a combat zone or from wounds, disease, or injury incurred in a combat zone, the decedent's income tax liability is abated (forgiven) for the entire year in which death occurred and for any prior tax year ending on or after the first day the person served in a combat zone in active service. Turbotax amend For this purpose, a qualified hazardous duty area is treated as a combat zone. Turbotax amend If the tax (including interest, additions to the tax, and additional amounts) for these years has been assessed, the assessment will be forgiven. Turbotax amend If the tax has been collected (regardless of the date of collection), that tax will be credited or refunded. Turbotax amend Any of the decedent's income tax for tax years before those mentioned above that remains unpaid as of the actual (or presumptive) date of death will not be assessed. Turbotax amend If any unpaid tax (including interest, additions to the tax, and additional amounts) has been assessed, this assessment will be forgiven. Turbotax amend Also, if any tax was collected after the date of death, that amount will be credited or refunded. Turbotax amend The date of death of a member of the Armed Forces reported as missing in action or as a prisoner of war is the date his or her name is removed from missing status for military pay purposes. Turbotax amend This is true even if death actually occurred earlier. Turbotax amend For other tax information for members of the Armed Forces, see Publication 3, Armed Forces' Tax Guide. Turbotax amend Military or Terrorist Actions The decedent's income tax liability is forgiven if, at death, he or she was a military or civilian employee of the United States who died because of wounds or injury incurred: While a U. Turbotax amend S. Turbotax amend employee, and In a military or terrorist action. Turbotax amend The forgiveness applies to the tax year in which death occurred and for any earlier tax year, beginning with the year before the year in which the wounds or injury occurred. Turbotax amend Example. Turbotax amend The income tax liability of a civilian employee of the United States who died in 2013 because of wounds incurred while a U. Turbotax amend S. Turbotax amend employee in a terrorist attack that occurred in 2008 will be forgiven for 2013 and for all prior tax years in the period 2007 through 2012. Turbotax amend Refunds are allowed for the tax years for which the period for filing a claim for refund has not ended, as discussed later. Turbotax amend Military or terrorist action defined. Turbotax amend   A military or terrorist action means the following. Turbotax amend Any terrorist activity that most of the evidence indicates was directed against the United States or any of its allies. Turbotax amend Any military action involving the U. Turbotax amend S. Turbotax amend Armed Forces and resulting from violence or aggression against the United States or any of its allies, or the threat of such violence or aggression. Turbotax amend   Terrorist activity includes criminal offenses intended to coerce, intimidate, or retaliate against the government or civilian population. Turbotax amend Military action does not include training exercises. Turbotax amend Any multinational force in which the United States is participating is treated as an ally of the United States. Turbotax amend Determining if a terrorist activity or military action has occurred. Turbotax amend   You may rely on published guidance from the IRS to determine if a particular event is considered a terrorist activity or military action. Turbotax amend Specified Terrorist Victim The Victims of Terrorism Tax Relief Act of 2001 (the Act) provides tax relief for those injured or killed as a result of terrorist attacks, certain survivors of those killed as a result of terrorist attacks, and others who were affected by terrorist attacks. Turbotax amend Under the Act, the federal income tax liability of those killed in the following attacks (specified terrorist victim) is forgiven for certain tax years. Turbotax amend The April 19, 1995, terrorist attack on the Alfred P. Turbotax amend Murrah Federal Building (Oklahoma City). Turbotax amend The September 11, 2001, terrorist attacks. Turbotax amend The terrorist attacks involving anthrax occurring after September 10, 2001, and before January 1, 2002. Turbotax amend The Act also exempts from federal income tax the following types of income. Turbotax amend Qualified disaster relief payments made after September 10, 2001, to cover personal, family, living, or funeral expenses incurred because of a terrorist attack. Turbotax amend Certain disability payments received in tax years ending after September 10, 2001, for injuries sustained in a terrorist attack. Turbotax amend Certain death benefits paid by an employer to the survivor of an employee because the employee died as a result of a terrorist attack. Turbotax amend Payments from the September 11th Victim Compensation Fund 2001. Turbotax amend The Act also reduces the estate tax of individuals who die as a result of a terrorist attack. Turbotax amend See Publication 3920, Tax Relief for Victims of Terrorist Attacks, for more information. Turbotax amend Astronauts Legislation extended the tax relief available under the Victims of Terrorism Tax Relief Act of 2001 (the Act) to astronauts who died in the line of duty after December 31, 2002. Turbotax amend The decedent's income tax liability is forgiven for the tax year in which death occurs, and for the tax year prior to death. Turbotax amend For information on death benefit payments and the reduction of federal estate taxes, see Publication 3920. Turbotax amend However, the discussions in that publication under Death Benefits and Estate Tax Reduction should be modified for astronauts (for example, by using the date of death of the astronaut instead of September 11, 2001). Turbotax amend For more information on the Act, see Publication 3920. Turbotax amend Claim for Credit or Refund If any of these tax-forgiveness situations applies to a prior year tax, any tax paid for which the period for filing a claim has not ended will be credited or refunded. Turbotax amend If any tax is still due, it will be canceled. Turbotax amend The normal period for filing a claim for credit or refund is 3 years after the return was filed or 2 years after the tax was paid, whichever is later. Turbotax amend If death occurred in a combat zone or from wounds, disease, or injury incurred in a combat zone, the period for filing the claim is extended by: The amount of time served in the combat zone (including any period in which the individual was in missing status), plus The period of continuous qualified hospitalization for injury from service in the combat zone, if any, plus The next 180 days. Turbotax amend Qualified hospitalization means any hospitalization outside the United States and any hospitalization in the United States of not more than 5 years. Turbotax amend This extended period for filing the claim also applies to a member of the Armed Forces who was deployed outside the United States in a designated contingency operation. Turbotax amend Filing a claim. Turbotax amend   Use the following procedures to file a claim. Turbotax amend If a U. Turbotax amend S. Turbotax amend individual income tax return (Form 1040, 1040A, or 1040EZ) has not been filed, you should make a claim for refund of any withheld income tax or estimated tax payments by filing Form 1040. Turbotax amend Form W-2, Wage and Tax Statement, must accompany all returns. Turbotax amend If a U. Turbotax amend S. Turbotax amend individual income tax return has been filed, you should make a claim for refund by filing Form 1040X. Turbotax amend You must file a separate Form 1040X for each year in question. Turbotax amend   You must file these returns and claims at the following address for regular mail (U. Turbotax amend S. Turbotax amend Postal Service). Turbotax amend    Internal Revenue Service 333 W. Turbotax amend Pershing, P5–6503 Kansas City, MO 64108   Identify all returns and claims for refund by writing “Iraq—KIA,” “Enduring Freedom—KIA,” “Kosovo Operation—KIA,” “Desert Storm—KIA,” or “Former Yugoslavia—KIA” in bold letters on the top of page 1 of the return or claim. Turbotax amend On the applicable return, write the same phrase on the line for total tax. Turbotax amend If the individual was killed in a terrorist or military action, put “KITA” on the front of the return and on the line for total tax. Turbotax amend   Include an attachment showing the computation of the decedent's tax liability and a computation of the amount to be forgiven. Turbotax amend On joint returns, make an allocation of the tax as described below under Joint returns. Turbotax amend If you cannot make a proper allocation, attach a statement of all income and deductions allocable to each spouse and the IRS will make the proper allocation. Turbotax amend   You must attach Form 1310 to all returns and claims for refund. Turbotax amend However, for exceptions to filing Form 1310, see Form 1310. Turbotax amend Statement of Person Claiming Refund Due a Deceased Taxpayer, under Refund, earlier. Turbotax amend   You must also attach proof of death that includes a statement that the individual was a U. Turbotax amend S. Turbotax amend employee on the date of injury and on the date of death and died as the result of a military or terrorist action. Turbotax amend For military and civilian employees of the Department of Defense, attach DD Form 1300, Report of Casualty. Turbotax amend For other U. Turbotax amend S. Turbotax amend civilian employees killed in the United States, attach a death certificate and a certification (letter) from the federal employer. Turbotax amend For other U. Turbotax amend S. Turbotax amend civilian employees killed overseas, attach a certification from the Department of State. Turbotax amend   If you do not have enough tax information to file a timely claim for refund, you can suspend the period for filing a claim by filing Form 1040X. Turbotax amend Attach Form 1310, any required documentation currently available, and a statement that you will file an amended claim as soon as you have the required tax information. Turbotax amend Joint returns. Turbotax amend   If a joint return was filed, only the decedent's part of the income tax liability is eligible for forgiveness. Turbotax amend Determine the decedent's tax liability as follows. Turbotax amend Figure the income tax for which the decedent would have been liable if a separate return had been filed. Turbotax amend Figure the income tax for which the spouse would have been liable if a separate return had been filed. Turbotax amend Multiply the joint tax liability by a fraction. Turbotax amend The numerator of the fraction is the amount in (1), above. Turbotax amend The denominator of the fraction is the total of (1) and (2). Turbotax amend   The resulting amount from (3) above is the decedent's tax liability eligible for forgiveness. Turbotax amend Filing Reminders To minimize the time needed to process the decedent's final return and issue any refund, be sure to follow these procedures. Turbotax amend Write “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Turbotax amend If a personal representative has been appointed, the personal representative must sign the return. Turbotax amend If it is a joint return, the surviving spouse must also sign it. Turbotax amend If you are the decedent's spouse filing a joint return with the decedent and no personal representative has been appointed, write “Filing as surviving spouse” in the area where you sign the return. Turbotax amend If no personal representative has been appointed and if there is no surviving spouse, the person in charge of the decedent's property must file and sign the return as “personal representative. Turbotax amend ” To claim a refund for the decedent, do the following. Turbotax amend If you are the decedent's spouse filing a joint return with the decedent, file only the tax return to claim the refund. Turbotax amend If you are the personal representative and the return is not a joint return filed with the decedent's surviving spouse, file the return and attach a copy of the certificate that shows your appointment by the court. Turbotax amend (A power of attorney or a copy of the decedent's will is not acceptable evidence of your appointment as the personal representative. Turbotax amend ) If you are filing an amended return, attach Form 1310 and a copy of the certificate of appointment (or, if you have already sent the certificate of appointment to IRS, write “Certificate Previously Filed” at the bottom of Form 1310). Turbotax amend If you are not filing a joint return as the surviving spouse and a personal representative has not been appointed, file the return and attach Form 1310. Turbotax amend Other Tax Information Discussed below is information about the effect of an individual's death on the income tax liability of the survivors (including widows and widowers), the beneficiaries, and the estate. Turbotax amend Tax Benefits for Survivors Survivors can qualify for certain benefits when filing their own income tax returns. Turbotax amend Joint return by surviving spouse. Turbotax amend   A surviving spouse can file a joint return for the year of death and may qualify for special tax rates for the following 2 years, as explained under Qualifying widows and widowers, later. Turbotax amend Decedent as your dependent. Turbotax amend   If the decedent qualified as your dependent for a part of the year before death, you can claim the exemption for the dependent on your tax return, regardless of when death occurred during the year. Turbotax amend   If the decedent was your qualifying child, you may be able to claim the child tax credit or the earned income credit. Turbotax amend To determine if you qualify for the child tax credit, see the instructions for Form 1040, line 51; Form 1040A, line 33; or Form 1040NR, line 48. Turbotax amend To determine if you qualify for the earned income credit, see the instructions for Form 1040, lines 64a and 64b or Form 1040A, lines 38a and 38b. Turbotax amend Qualifying widows and widowers. Turbotax amend   If your spouse died within the 2 tax years preceding the year for which your return is being filed, you may be eligible to claim the filing status of qualifying widow(er) with dependent child and qualify to use the married-filing-jointly tax rates. Turbotax amend Requirements. Turbotax amend   Generally, you qualify for this special benefit if you meet all of the following requirements. Turbotax amend You were entitled to file a joint return with your spouse for the year of death—whether or not you actually filed jointly. Turbotax amend You did not remarry before the end of the current tax year. Turbotax amend You have a child, stepchild, or foster child who qualifies as your dependent for the tax year. Turbotax amend You provide more than half the cost of maintaining your home, which is the principal residence of that child for the entire year except for temporary absences. Turbotax amend Example. Turbotax amend William Burns' wife died in 2010. Turbotax amend William has not remarried and continued throughout 2011 and 2012 to maintain a home for himself and his dependent child. Turbotax amend For 2010, he was entitled to file a joint return for himself and his deceased wife. Turbotax amend For 2011 and 2012, he qualifies to file as a qualifying widower with dependent child. Turbotax amend For later years, he may qualify to file as a head of household. Turbotax amend Figuring your tax. Turbotax amend   Check the box on line 5 (Form 1040 or 1040A) under Filing Status on your tax return. Turbotax amend Use the Tax Rate Schedule or the column in the Tax Table for Married filing jointly, which gives you the split-income benefits. Turbotax amend   The last year you can file jointly with, or claim an exemption for, your deceased spouse is the year of death. Turbotax amend Joint return filing rules. Turbotax amend   If you are the surviving spouse and a personal representative is handling the estate for the decedent, you should coordinate filing your return for the year of death with this personal representative. Turbotax amend See Joint Return under Final Income Tax Return for Decedent—Form 1040, earlier. Turbotax amend Income in Respect of a Decedent All income the decedent would have received had death not occurred that was not properly includible on the final return, discussed earlier, is income in respect of a decedent. Turbotax amend If the decedent is a specified terrorist victim (see Specified Terrorist Victim, earlier), income received after the date of death and before the end of the decedent's tax year (determined without regard to death) is excluded from the recipient's gross income. Turbotax amend This exclusion does not apply to certain income. Turbotax amend For more information, see Publication 3920. Turbotax amend How To Report Income in respect of a decedent must be included in the income of one of the following. Turbotax amend The decedent's estate, if the estate receives it. Turbotax amend The beneficiary, if the right to income is passed directly to the beneficiary and the beneficiary receives it. Turbotax amend Any person to whom the estate properly distributes the right to receive it. Turbotax amend If you have to include income in respect of a decedent in your gross income and an estate tax return (Form 706) was filed for the decedent, you may be able to claim a deduction for the estate tax paid on that income. Turbotax amend See Estate Tax Deduction, later. Turbotax amend Example 1. Turbotax amend Frank Johnson owned and operated an apple orchard. Turbotax amend He used the cash method of accounting. Turbotax amend He sold and delivered 1,000 bushels of apples to a canning factory for $2,000, but did not receive payment before his death. Turbotax amend The proceeds from the sale are income in respect of a decedent. Turbotax amend When the estate was settled, payment had not been made and the estate transferred the right to the payment to his widow. Turbotax amend When Frank's widow collects the $2,000, she must include that amount in her return. Turbotax amend It is not reported on the final return of the decedent or on the return of the estate. Turbotax amend Example 2. Turbotax amend Assume the same facts as in Example 1, except that Frank used the accrual method of accounting. Turbotax amend The amount accrued from the sale of the apples would be included on his final return. Turbotax amend Neither the estate nor the widow would realize income in respect of a decedent when the money is later paid. Turbotax amend Example 3. Turbotax amend On February 1, George High, a cash method taxpayer, sold his tractor for $3,000, payable March 1 of the same year. Turbotax amend His adjusted basis in the tractor was $2,000. Turbotax amend George died on February 15, before receiving payment. Turbotax amend The gain to be reported as income in respect of a decedent is the $1,000 difference between the decedent's basis in the property and the sale proceeds. Turbotax amend In other words, the income in respect of a decedent is the gain the decedent would have realized had he lived. Turbotax amend Example 4. Turbotax amend Cathy O'Neil was entitled to a large salary payment at the date of her death. Turbotax amend The amount was to be paid in five annual installments. Turbotax amend The estate, after collecting two installments, distributed the right to the remaining installments to you, the beneficiary. Turbotax amend The payments are income in respect of a decedent. Turbotax amend None of the payments were includible on Cathy's final return. Turbotax amend The estate must include in its income the two installments it received, and you must include in your income each of the three installments as you receive them. Turbotax amend Example 5. Turbotax amend You inherited the right to receive renewal commissions on life insurance sold by your father before his death. Turbotax amend You inherited the right from your mother, who acquired it by bequest from your father. Turbotax amend Your mother died before she received all the commissions she had the right to receive, so you received the rest. Turbotax amend The commissions are income in respect of a decedent. Turbotax amend None of these commissions were includible in your father's final return. Turbotax amend The commissions received by your mother were included in her income. Turbotax amend The commissions you received are not includible in your mother's income, even on her final return. Turbotax amend You must include them in your income. Turbotax amend Character of income. Turbotax amend   The character of the income you receive in respect of a decedent remains the same as it would have been to the decedent if he or she were alive. Turbotax amend If the income would have been a capital gain to the decedent, it will be a capital gain to you. Turbotax amend Transfer of right to income. Turbotax amend   If you transfer your right to income in respect of a decedent, you must include in your income the greater of: The amount you receive for the right, or The fair market value of the right you transfer. Turbotax amend   If you make a gift of such a right, you must include in your income the fair market value of the right at the time of the gift. Turbotax amend   If the right to income from an installment obligation is transferred, the amount you must include in income is reduced by the basis of the obligation. Turbotax amend See Installment obligations, later. Turbotax amend Transfer defined. Turbotax amend   A transfer for this purpose includes a sale, exchange, or other disposition, the satisfaction of an installment obligation at other than face value, or the cancellation of an installment obligation. Turbotax amend Installment obligations. Turbotax amend   If the decedent sold property using the installment method and you are collecting payments on an installment obligation acquired from the decedent, use the same gross profit percentage the decedent used to figure the part of each payment that represents profit. Turbotax amend Include in your income the same profit the decedent would have included had death not occurred. Turbotax amend For more information, see Publication 537, Installment Sales. Turbotax amend   If you dispose of an installment obligation acquired from a decedent (other than by transfer to the obligor), the rules explained in Publication 537 for figuring gain or loss on the disposition apply to you. Turbotax amend Transfer to obligor. Turbotax amend   A transfer of a right to income, discussed earlier, has occurred if the decedent (seller) sold property using the installment method and the installment obligation was transferred to the obligor (buyer or person legally obligated to pay the installments). Turbotax amend A transfer also occurs if the obligation was canceled either at death or by the estate or person receiving the obligation from the decedent. Turbotax amend An obligation that becomes unenforceable is treated as having been canceled. Turbotax amend   If such a transfer occurs, the amount included in the income of the transferor (the estate or beneficiary) is the greater of the amount received or the fair market value of the installment obligation at the time of transfer, reduced by the basis of the obligation. Turbotax amend The basis of the obligation is the decedent's basis, adjusted for all installment payments received after the decedent's death and before the transfer. Turbotax amend   If the decedent and obligor were related persons, the fair market value of the obligation cannot be less than its face value. Turbotax amend Specific Types of Income in Respect of a Decedent This section explains and provides examples of some specific types of income in respect of a decedent. Turbotax amend Wages. Turbotax amend   The entire amount of wages or other employee compensation earned by the decedent but unpaid at the time of death is income in respect of a decedent. Turbotax amend The income is not reduced by any amounts withheld by the employer. Turbotax amend If the income is $600 or more, the employer should report it in box 3 of Form 1099-MISC, Miscellaneous Income, and give the recipient a copy of the form or a similar statement. Turbotax amend   Wages paid as income in respect of a decedent are not subject to federal income tax withholding. Turbotax amend However, if paid during the calendar year of death, they are subject to withholding for social security and Medicare taxes. Turbotax amend These taxes should be included on the decedent's Form W-2 along with the taxes withheld before death. Turbotax amend These wages are not included in box 1 of Form W-2. Turbotax amend   Wages paid as income in respect of a decedent after the year of death generally are not subject to withholding for any federal taxe
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The Turbotax Amend

Turbotax amend Part One -   Fuel Taxes and Fuel Tax Credits and Refunds Chapter 1 defines the types of fuel, taxable events, and exemptions or exceptions to the fuel taxes. Turbotax amend Chapter 2 provides information on, and definitions of, the nontaxable uses and explains how to make a claim. Turbotax amend Table of Contents 1. Turbotax amend   Fuel TaxesDefinitions Information Returns Registration RequirementsAdditional information. Turbotax amend Gasoline and Aviation GasolineTaxable Events Gasoline Blendstocks Diesel Fuel and KeroseneTaxable Events Dyed Diesel Fuel and Dyed Kerosene Alaska and Feedstocks Back-up Tax Diesel-Water Fuel Emulsion Kerosene for Use in AviationTaxable Events Liability For Tax Surtax on any liquid used in a fractional ownership program aircraft as fuel Certificate for Commercial Aviation and Exempt UsesExempt use. Turbotax amend Reseller statement. Turbotax amend Other Fuels (Including Alternative Fuels)Taxable Events Compressed Natural Gas (CNG)Taxable Events Fuels Used on Inland WaterwaysFishing vessels. Turbotax amend Deep-draft ocean-going vessels. Turbotax amend Passenger vessels. Turbotax amend Ocean-going barges. Turbotax amend State or local governments. Turbotax amend Cellulosic or Second Generation Biofuel Not Used as Fuel Biodiesel Sold as But Not Used as Fuel 2. Turbotax amend   Fuel Tax Credits and RefundsGasoline and Aviation Gasoline Undyed Diesel Fuel and Undyed Kerosene (Other Than Kerosene Used in Aviation)Sales by Registered Ultimate Vendors Diesel-Water Fuel Emulsion Kerosene for Use in AviationSales by Registered Ultimate Vendors Other Fuels (Including Alternative Fuels) Refunds of Second TaxOptional reporting. Turbotax amend Providing information. Turbotax amend Definitions of Nontaxable UsesCustom application of fertilizer and pesticide. Turbotax amend Fuel used between airfield and farm. Turbotax amend Fuel not used for farming. Turbotax amend Vehicles not considered highway vehicles. Turbotax amend Biodiesel or Renewable Diesel Mixture Credit, Alternative Fuel Credit, and Alternative Fuel Mixture CreditHow to Claim the Credit Filing Claims Claiming A Refund Claiming a Credit on Form 4136 Including the Credit or Refund in Income Prev  Up  Next   Home   More Online Publications