Asked in Estate Planning, Tax Law and Probate for Utah

Q: What kind of tax is applicable (estate or income) on the dividend distributions made to decedent after his death?

Decedent received dividend distributions after his death. Does Estate have to pay estate tax or income tax?

1 Lawyer Answer
Wesley Winsor
Wesley Winsor
PREMIUM
Answered
  • Estate Planning Lawyer
  • Saint George, UT
  • Licensed in Utah

A: Hi, dividend income would be considered income tax. The estate tax has to deal with the total amount of value passing from the decedent to others. So, it can be counted as both--income when received by the estate and an amount chipping away at the estate tax exemption credit. Most people are not fortunate enough to have an estate tax problem. The current exemption amount is 11.5 million dollars. On the decedent's final tax return you calculate all the income the decedent't earned while alive and after death in that tax year and submit a final estate tax return.

If there are still income producing assets that will be held in the estate, then the estate will take on a tax id of its own.

I hope this helps.

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