Ten Types of Taxes You May Have to Pay

• Author: Margaret A. Munro, Kathryn A. Murphy
• Profession: Has more than 30 years' experience in trusts, estates, family tax, and small businesses/Attorney with more than 20 years' experience administering estates and trusts and preparing estate and gift tax returns
• Pages: 353-358

CHAPTER 22 Ten Types of Taxes You May Have to Pay 353

Chapter22

Ten Types of Taxes You

May Have to Pay

We’d love to be able to be able to tell you that negotiating your way

through the tax implications of estates and trusts is an easy matter.

Unfortunately, it can get pretty complicated because one event can

often lead to multiple taxes being owed. Don’t ask us why. We don’t make the

rules, but we’re stuck with ’em the same as you.

In this chapter, we give you the top-ten list of the taxes you may come across in

the process of administering an estate or trust. Chances are good you won’t be

responsible for paying all of them, but the odds are also good that you won’t avoid

paying taxes altogether.

With the exception of federal income taxes and federal and state estate, gift, and

inheritance taxes, all taxes you pay on behalf of the trust or estate are deductible

on that entity’s income tax returns. Of course, you actually have to have paid the

taxes in order to deduct. If the check is written but still sitting in the envelope

waiting to be mailed on the last business day of any tax year, you can’t use that

deduction until the next year.

IN THIS CHAPTER

»

Making sense of the transfer-tax trio

»

Figuring out the dierence between

taxes on income and taxes on owned

items