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DH is Executor on two estates that may wrap up this year. He will be able to get paid for his time, and so I am thinking that he will receive a 1099 for that income that we will report on our taxes. I am also thinking that since this will be 1099 income, there will be no FICA, and so won't he owe the other 7.5% of FICA like on his self-employment income? And does that mean this gets reported on his Schedule C? Or is this considered something else, and just gets lumped in somewhere on our 1040 with no additional FICA taken out anywhere?

I'm just trying to be proactive in terms of understanding where and how this income will be reported. Anyone know or can point me to the right publication?
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I'm just trying to be proactive in terms of understanding where and how this income will be reported.

As long as he's not in the trade or business of administering estates, it's 1040 line 21 other income. No 1099 required to be issued since the estate isn't operating a business. See the 1099-MISC instructions and Pub 529.

Phil
Rule Your Retirement Home Fool
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As long as he's not in the trade or business of administering estates, it's 1040 line 21 other income. No 1099 required to be issued since the estate isn't operating a business. See the 1099-MISC instructions and Pub 529.


Thanks. He's not in that as a trade, but is doing it for his aunt and his dad, and the estates are a bit intertwined.

I'll go take a look at the publication now so that I know what's up.

Thanks for the help. I knew this was the right place to ask.
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DH is Executor on two estates that may wrap up this year. He will be able to get paid for his time, and so I am thinking that he will receive a 1099 for that income that we will report on our taxes. I am also thinking that since this will be 1099 income, there will be no FICA, and so won't he owe the other 7.5% of FICA like on his self-employment income? And does that mean this gets reported on his Schedule C? Or is this considered something else, and just gets lumped in somewhere on our 1040 with no additional FICA taken out anywhere?

The fees he receives as Executor should be reported to him on Form 1099-MISC if greater than $600. How the fees get reported on your (if filing jointly) return depends on whether he was acting in a personal or professional capacity with regard to being an Executor.

If he routinely acts as an Executor, or acting as Executor would be a logincal extension of other professional services he provided to the deceased, the income would be reported on Schedule C and be subject to SECA (both sides of FICA/medicare).

However, if he was named as Executor due to his status as a family member or personal friend and he doesn't routinely serve as an Executor, then the income is reported on Line 21, Other Income and is not subject to FICA/medicare (SECA). The 1099-MISC will probably report the fees in Box 7, but they could appear in Box 3. If Box 7, you can expect a follow-up letter from the IRS, since the IRS assumes all Box 7 payments are subject to SECA. All you will have to do is explain the nature of the payment and the IRS will be satisfied.

Ira
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The fees he receives as Executor should be reported to him on Form 1099-MISC if greater than $600.

I have to disagree. Here's what the 1099-MISC instructions have to say:

Trade or business reporting only. Report on Form
1099-MISC only when payments are made in the course of your
trade or business. Personal payments are not reportable. You
are engaged in a trade or business if you operate for gain or
profit. However, nonprofit organizations are considered to be
engaged in a trade or business and are subject to these reporting requirements. Organizations also subject to these
reporting requirements include trusts of qualified pension or
profit-sharing plans of employers, certain organizations exempt
from tax under section 501(c) or (d), farmers’ cooperatives that
are exempt from tax under section 521, and widely held fixed
investment trusts. Payments by federal, state, or local
government agencies are also reportable.


I hope I'm right since I've never issued a 1099-MISC in the five estates I've administered.

Phil
Rule Your Retirement Home Fool
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The fees he receives as Executor should be reported to him on Form 1099-MISC if greater than $600.

I have to disagree. Here's what the 1099-MISC instructions have to say:
...


I stand corrected. Thanks for the oversight, Phil.

Ira
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