Legal Question in Wills and Trusts in California

My wife is the court appointed administrator for the estate of her mother who died last year at age 94. It is a small estate comprised of her mom's home appraised by the court at $255k. The house sold for $252.5k leaving after expenses (reverse mortgage payout, and closing costs) about $48k.

Because she is administrator she can charge the estate an administration fee of about $8k.

My question is this taxable income, and if so does it get claimed on our personal returns, or can we file a return for the estate and pay the taxes from the estate proceeds?

What is the best way to handle this charge. There is so little to distribute to the heirs that taxing any part of the profits seems unreasonable.

Thanks


Asked on 1/14/10, 2:23 pm

1 Answer from Attorneys
Michele Cusack Pollak & Cusack

If your wife take's the administrator's fee, it is subject to income tax, payable by her personally. If she waives the fee, there will be no income tax, but the $8,000 would be distributed amongst the residual beneficiaries of the estate.

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Answered on 1/19/10, 3:35 pm


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