Executor Duties

• If a deceased failed to identify an executor in his will, a court will generally appoint one to shepherd the deceased's estate through probate, if necessary, and to file a final individual tax return for the decedent. The IRS also requires an executor to file annual tax returns for the deceased's estate until the executor is able to settle the estate. An executor must locate and appraise the assets held in a decedent's estate and, if the estate lacks sufficient liquidity to satisfy the decedent's debts, decide which assets to sell in exchange for cash. An executor must also pay bills owed by a decedent and his estate, including the deceased's income and estate taxes and burial expenses. After satisfying all obligations of a deceased and his estate, an executor must distribute an estate's assets to the decedent's beneficiaries in exact accordance with the wishes expressed in the deceased's will.
  
  

Tax Deadlines

• An executor must file a decedent's final income tax return by the deadline applicable to the decedent, usually April 15 of the year after the deceased's death. The IRS requires an executor to file a tax return for the decedent's estate using Form 706 and to pay any estate tax owed within nine months of the deceased's death. The IRS will grant an executor a six-month extension if he files Form 4768 before the original nine-month deadline.
  
  

Estate Tax Deductions

• The IRS allows an executor to report deductions on an estate's tax return. Among others, the IRS permits deductions for property transferred to a decedent's spouse, charitable donations, debts paid on behalf of the decedent and the decedent's burial expenses.
  
  

Funeral Expenses

• The IRS allows an executor to deduct the cost of a decedent's funeral on the deceased's estate tax return in an amount actually paid by the estate. Before itemizing the decedent's burial expenses on Schedule J of Form 706, the executor must subtract funds reimbursed to the estate to pay for the decedent's funeral from any source such as Social Security or the Veterans Administration. An executor transfers the sum of the decedent's burial expenses recorded on Schedule J onto Line 13 in Part 5-Recapitulation of Form 706 as an estate tax deduction.