EST2606. Death, Taxes, and the Business Entity: Fiduciary Income Tax Traps When an Owner Dies

When a business owner dies, income tax issues do not stop with the filing of the final individual return. Instead, fiduciary income tax considerations quickly arise as ownership interests pass to an estate or trust and entity-level income continues to be generated. This program explores the fiduciary income tax issues that commonly occur following the death of a shareholder or partner, including the allocation of income between the decedent and the estate, basis adjustments, income in respect of a decedent (IRD), and entity-specific considerations for S corporations and partnerships. Attendees will gain practical insights into common pitfalls, planning opportunities, and coordination challenges faced by fiduciaries and their advisors when administering business interests after death.

Learning Objectives:

• Identify key fiduciary income tax issues that arise upon the death of a shareholder or partner, including IRD, income allocation, and basis considerations.
• Distinguish between the post-death income tax treatment of corporate stock and partnership interests, including the impact of §754 elections and fiduciary shareholder rules.
• Apply practical planning strategies to minimize fiduciary income tax exposure and avoid common administration mistakes when estates or trusts hold business interests.