As the executor of an estate in Nevada, you have a lot of responsibilities. If you don’t fulfill those obligations, you could face challenges in probate court or possibly personal liability. For example, you have to locate and protect the property owned by the testator. You also have to file paperwork with the courts and send notices to certain creditors.
You will also have some tax responsibilities during estate administration. What kinds of taxes might you need to file or pay as the representative of an estate in Nevada?
Estate taxes
Nevada does not levy an estate tax when someone dies, but the federal government still does. If someone dies with an estate worth millions of dollars, there may be tax obligations that you have to fulfill based on the total value of the estate.
A final individual income tax return
Typically, it is the representative of someone’s estate who handles their final tax filing with the Internal Revenue Service (IRS) and the state of Nevada. Although the decedent may not have had any income in recent years, a final return is necessary to resolve any outstanding tax debts and notify the IRS of someone’s passing.
Estate income taxes
The administration of an estate often involves the sale of some assets. If you sell estate property to repay creditors or distribute the profits of those sales to certain beneficiaries, you may have to file a federal income tax return on behalf of the estate. Sale proceeds in excess of $600 will lead to income tax responsibilities.
Understanding and fulfilling your responsibilities as the executor of an estate will help protect you from legal or financial risks.