DonBa wrote:
- quote -

It's not SE income unless your client is "in the
business" of being an administrator. It's generally
miscellaneous income, but it IS reportable.

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- quote -

Only if the administrator is generally in the business of
estate administration. The family member who gets paid for
the time and headache of settling the estate isn't in the
business, so no self-employment tax.

--
Thomas E Healy, CPA, PC
1650 38th St., Ste 202W
Boulder, CO 80301
Please send email to: tom[at]tomhealycpa.com, since I block all email at my
newsgroup address.
phone (303) 443-1804
fax (720) 489-3772

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thetaxdon[at]yahoo.com (DonBa) wrote in
- quote -

Don,

Unless it is different in the particular state, under
federal tax law executor fees are not self employment income
unless the person is in the business of being an executor or
administrator for estates. Doing it from occasionaly,
particularly for family members does not mean you are in the
business of being a professional fiduciary.

Martha Matthews, EA

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thetaxdon[at]yahoo.com (DonBa) wrote:
- quote -

Unless the administrator/executor performs these services as
a business, the above statement is incorrect. If this was a
"one time" service, usually performed by a family member,
the fee paid is considered Other Income, and entered on Line
21 of the 1040 form. No self employment taxes are due.

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DonBa wrote:
- quote -

Oops! Hold the phone there.

Unless the executor or administrator is in the regular trade
or business of being such, then no SE tax. But you're
right, it is (self employment) income to the client.

ChEAr$,
Harlan Lunsford, EA n LA

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"DonBa" <thetaxdon[at]yahoo.com> wrote

- quote -

Administrator fees are NOT self employment income unless he
or she is in the business of being and administrator.
Usually the executor or administrator of an estate is
someone who is doing it as a one-time thing and the fees are
therefore not self-employment income. The fees are, of
course, subject to income tax however.

Vida Freeman, EA

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bm30003700[at]aol.com (BM30003700) wrote:

- quote -

I don't know if it's required but I would highly recommend
it. Don't forget that the administrator fees are self
employment income to your client.

Don in Colorado

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BM30003700 wrote:

- quote -

While I can't speak to any legal requirements to do so,
I still think it "necessary", to avoid squabbles between
kith and kin and to avoid any appearance of doing evil.

ChEAr$,
Harlan Lunsford, EA n LA
Mon, 29 Nov 2004 15:51:32

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BM30003700 wrote:

- quote -

Depends on the laws in your state. In California any estate
that goes through probate requires a full accounting, unless
all the heirs specifically waive it in writing.

Stu

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Is it necessary to "account to the other heirs" if no
accounting is requested by the other heirs?

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Harlan Lunsford wrote:

- quote -

Hey! Not all lawyers are self-centered, self-important,
selfish jerks. I've known many, many lawyers over the
years, and in my opinion I'd say 98%, yes a full 98%, are
the ones that give the rest of us a bad name.

Stu

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BM30003700 wrote:

- quote -

Well, I'm NOT a lawyer (thank GOD!) but certainly any
executor is entitled to a "reasonable" fee. State law
usually.

Whether that reasonable fee is 7400, 7500, or 10,000$ I
can't say. Nor can you without any detailed information on
the extent of her efforts.

So your attempt to get an hourly accounting is a really good
first step. You might seek the opinions of a lawyer you can
trust. *YES, I know what I said!

However the fee is determined, remember also, that in
accounting to the other heirs, the fee might be questioned.

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

There are state statutes which may limit certain charges to
the estate. Even if certain fees are not limited by
statute, courts may review fees to determine if they are
excessive.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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BM30003700 wrote:

- quote -

It depends on many things. In most states when an estate
goes through probate the court will have to approve any
fees. In California basic fees are determined by statute to
be a percentage of the size of the estate (in general a bit
over 2%).

My suggestion is that your administrator keep track of (or
reconstruct for the past) the time she spends on dealing
with estate matters, and then apply a reasonable hourly rate
- in California I'd use $100 per hour.

Stu

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I am working on an estate tax return. The administrator has
worked very hard on the estate.

The administrator was the decedent's sister, and one of nine
beneficiaries. All beneficiaries are all siblings or half
siblings to the decedent.

Although the estate is below the filing threshold for
federal tax purposes, it is above the threshhold for
Washington state estate tax purposes, so maximizing
legitimate deductions is desirable.

The administrator had been thinking of taking a $7,500 fee
for all her work, but now is thinking of $10,000.

Does this amount seem like it is out of the ordinary to
anyone here? I realize that this is a little like asking
how long is a piece of string, as each situation has it's
own peculiarities. I've asked the client to document
roughly how much time she's put into the estate
administration.

Although the estate itself was very liquid (investment
accounts, insurance proceeds, and cash), actually tracking
down the proper custodial contacts (brokers, etc) and
determining the size of the estate was tedious for my
client.

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