Estate & Fiduciary Taxes

At Sellers Johnson Law, we assist Trust and Estate fiduciaries, such as Trustees, Personal Representatives, and Executors, with Tax guidance and tax preparation services.  Specifically, we assist Trustees and Personal Representatives in preparing Trust income tax returns and Estate income tax returns, also known as fiduciary tax returns, both federal and state returns.  In addition, we assist Trustees and Personal Representatives in preparing federal and state estate tax returns, if applicable, and federal gift tax returns, if applicable.  We assist fiduciaries to recognize and understand when various returns are applicable and due for Federal and Maryland Estate Tax, Maryland Inheritance Tax, Federal Fiduciary Income Tax, and Maryland Fiduciary Income Tax.

Fiduciary Income Tax Returns

We advise Trustees and Personal Representatives regarding the need for Trust fiduciary tax returns--IRS Form 1041 for the federal government and Maryland Form 504 for the state of Maryland.  We also advise Maryland Trustees and Personal Representatives of Maryland Estates when it is necessary to file state fiduciary income tax forms for other states, depending on the decedent's domicile, location of Trustees, and location of beneficiaries.

A Fiduciary Income Tax Return is an income tax return for Trusts and Estates.  It is similar to a personal income tax return, but it tracks income and deductions for a Trust or an Estate, not for an individual person.  The IRS Federal Fiduciary Income Tax form is form 1041.  The Maryland Fiduciary Income Tax form is form 504.

Estate Tax Returns
 

We advise Trustees and Personal Representatives regarding the need for estate tax returns--IRS Form 706 for the federal government and Maryland Form MET-1 for the state of Maryland.  We also advise Maryland Trustees and Personal Representatives of Maryland Estates when it is necessary to file state estate tax returns for other states, depending on whether the decedent owned property or operated businesses in other states.


Trust & Estate Inventories and Fiduciary Accountings

We assist Trustees and Personal Representatives in collecting and inventorying Trust and Estate assets to establish date-of-death values of assets, Trusts, and Estates.  We also assist Trustees and Personal Representatives in accounting for all items of income, receipts, expenses, and distributions to beneficiaries.  We do this through preparation of the Trust Fiduciary Accounting and Estate Fiduciary Accounting, which we prepare in accordance with Fiduciary Accounting Principles.  

One of the most important duties of Trustees is to properly account for all transactions of the Trust and the Estate.  In order to do this, we prepare the Trust Fiduciary Accounting for Trustees to send to beneficiaries at least annually to keep beneficiaries informed about Trust transactions, assets, expenses, and income.  The Trust Fiduciary Accounting is the basis for preparing the Trust fiduciary income tax returns every year.

For Personal Representatives, we prepare the Estate Fiduciary Accounting for Personal Representatives to file with the probate court, through the Register of Wills.  In addition to filing with the Probate Court, the Estate Fiduciary Accounting is the basis for preparing the Estate Fiduciary Income Tax returns every year.

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