Read the Latest California News to Stay Ahead on Probate and Estate Planning

When Is the California Decedent’s Income Tax Return “Fiduciary?”

The state and federal governments may feel some compassion for the loss of your loved one, but it will not extend to waiving the taxes due. Income earned in California on assets in the decedent's estate after his or her death is taxable just like the income of any individual. That is, if the yearly income exceeds a gross income of $600 for federal tax purposes and a gross income of $10,000 for California purposes.

Tax returns are called "fiduciary" if the estate goes through a California probate process that is likely to take an entire year or more. The executor or administrator of the estate must be able to declare income received on the assets during the probate proceedings until these assets have been distributed. If real property and securities are sold during probate, a capital gains tax may be due.

When are fiduciary returns due?

This depends on when the taxable year starts. It may be a fiscal year determined by the accountant, executor, or administrator, or a calendar year. Fiduciary returns need to be filed no later than the fourth month after the end of the taxable year.

What happens if probate is not necessary?

In the event that the estate can be distributed without probate, the process is likely to be executed over a short period of time, and fiduciary returns will not normally be necessary. The income generated by the estate will become taxable on the personal returns of the beneficiaries.

Read More About When Is the California Decedent’s Income Tax Return “Fiduciary?”...

back to top