As the executor of an estate, you have to find and make sense of the will, file paperwork with the probate courts, notify creditors and hand out property. You also have an obligation to handle the taxes of your deceased loved one.
There are actually numerous different taxes that can affect an estate in Nevada. You should evaluate the estate carefully to determine which tax liabilities actually apply.
Income tax for the deceased
Almost every executor will have to file a last tax return for the deceased whose estate they must manage. Even if someone has not had income other than Social Security in recent years, they may still have tax obligations that their executor has to pay with estate resources.
Nevada does not assess an estate tax on the assets left behind when someone dies. Regardless of the value of the property in someone’s estate, their executor or heirs will not have to pay taxes on those assets. However, for estates worth more than $11.7 million, federal estate taxes may apply.
Income tax for the estate
It is common practice to have executors sell off assets and distribute the proceeds to the beneficiaries of the estate.
Whether you have to sell off investment holdings, real estate or a collection of classic cars, the income generated may be subject to taxation. If the revenue produced by an estate sale exceeds $600, you will have to file a tax return on behalf of the estate for the year in which those transactions took place.
Learning about your obligations during the probate process can help you ensure that you perform all of your duties correctly as an executor.