IRS Publication 559: Survivors, Executors & Administrators

IRS Publication 559 is the agency’s guide for survivors, executors, and administrators handling the tax affairs of someone who has died. It covers three separate filings that can come due after a death: the decedent’s final individual income tax return on Form 1040, the estate’s own income tax return on Form 1041, and, for larger estates, the federal estate tax return on Form 706. The stakes for getting this right are personal — a representative who distributes assets to heirs before settling the estate’s tax debts can be held personally liable for what’s still owed.¹

Who Is the Personal Representative

The personal representative is whoever is legally responsible for the decedent’s tax affairs. Usually that’s the executor named in the will, or an administrator appointed by the probate court if there is no will. The representative can file returns, pay debts, and deal directly with the IRS on the decedent’s behalf.²

Steps to Take Right Away

File Form 56 with the IRS as soon as you receive your letters testamentary or court appointment. This form tells the IRS who is authorized to act for the decedent, and you attach a copy of the court documentation to it.³

The estate needs its own Employer Identification Number. Apply online, by fax, or by mailing Form SS-4. The EIN is the estate’s taxpayer ID and keeps its finances separate from the decedent’s.⁴ Once you have it, open a bank account in the estate’s name. Do not mix estate funds with your personal money.

Then inventory what the decedent owned at death: real estate, bank and investment accounts, retirement plans, life insurance, business interests, and personal property of significant value. That inventory drives almost every tax decision that follows.

The Decedent’s Final Form 1040

The final individual return covers the period from the start of the decedent’s tax year through the date of death. Report the income the person actually received or had a right to receive while alive: wages, interest, dividends, rental income, and so on. Use Form 1040 or Form 1040-SR.⁵

The return is due on the normal April deadline of the year following death, and standard extensions apply. Someone who died in July 2026 has a final return due April 15, 2027.⁶

Filing Jointly With a Surviving Spouse

A surviving spouse can file a joint return for the year of death together with the personal representative. This usually produces a lower tax bill because of the wider brackets and larger standard deduction. The joint return covers the decedent’s income up to the date of death and the surviving spouse’s income for the full year.⁷ If no personal representative has been appointed, the surviving spouse signs alone and writes “filing as surviving spouse” in the signature area.⁸

Deductions, Losses, and Refunds

All the usual deductions still apply. Medical expenses paid before death, or paid by the estate within one year after death, can go on either the final Form 1040 or the estate tax return, but never both. If the estate won’t owe estate tax, the income tax deduction is usually more valuable.⁹

Capital loss carryovers and net operating losses from prior years can reduce the final tax bill, but any unused portion dies with the decedent. You cannot move leftover losses to the estate’s income tax return.¹⁰ If a refund is due, attach Form 1310 so the IRS can send it to the estate or the surviving spouse.

Income in Respect of a Decedent

Some income the decedent had earned but not yet received doesn’t belong on the final Form 1040 at all. This is called income in respect of a decedent, or IRD. Whoever ends up receiving it — the estate or a specific beneficiary — reports the income when the money actually arrives.¹¹

Common IRD items include:

Unpaid wages or bonuses owed at death.
Traditional IRA and 401(k) distributions the decedent had not yet taken.
Accrued U.S. savings bond interest, if the decedent used the cash method and had not been reporting interest annually.
Partnership income owed to the decedent’s interest.
Accrued rent or crop shares earned before death but not yet received.

IRD keeps whatever character the income would have had in the decedent’s hands. Ordinary income stays ordinary; capital gain stays capital gain.¹¹ And unlike most inherited property, IRD does not get a step-up in basis.¹² A beneficiary who inherits a traditional IRA pays income tax on distributions the same way the decedent would have.

The Estate’s Income Tax Return (Form 1041)

Starting the day after death, the estate is a separate taxpayer. Interest, dividends, rent, and other income generated by the estate’s assets after that date belong to the estate. If the estate’s gross income during its tax year reaches $600, the personal representative must file Form 1041.¹³

Estates can pick either a calendar year or a fiscal year for that first tax period. A fiscal year can push the first filing deadline out. Someone who died in March 2026 could choose a fiscal year ending January 31, and the first Form 1041 would then be due in May 2027 rather than April 2027. The return is due by the 15th day of the fourth month after the estate’s tax year closes.¹⁴

Estate income brackets are compressed. For 2026, the top 37% rate hits at just $16,000 of taxable income, so even modest amounts held inside the estate can face the top marginal rate. Administrative expenses like attorney fees, accountant fees, and fiduciary commissions can be claimed on either Form 1041 or Form 706, but not both. Because estate income brackets are so compressed, claiming these on Form 1041 is usually the better move unless the estate owes significant estate tax.¹³

When the estate distributes income to beneficiaries, it gets a deduction and the beneficiaries pick up the income on their own returns. Each beneficiary receives a Schedule K-1 showing their share of income, deductions, and credits, and must report those amounts consistently with how the estate treated them.¹⁵ Because individual brackets are almost always wider than the estate’s, distributing income to beneficiaries rather than accumulating it inside the estate is often the tax-efficient choice.¹⁶ If a beneficiary thinks a K-1 is wrong, they should ask the fiduciary for a corrected form rather than filing with a different number.

Federal Estate Tax and Form 706

The federal estate tax is a separate tax on the transfer of the decedent’s wealth. For 2026, estates worth more than $15 million must file Form 706. The exemption applies per individual, so a married couple can shelter up to $30 million between them. The top rate on amounts above the exemption is 40%.¹⁷

Form 706 is due nine months after the date of death. Filing Form 4768 before that date gets you an automatic six-month extension of time to file, but not to pay — estimated estate tax is still due at the nine-month mark.¹⁸

Portability of a Spouse’s Unused Exemption

If the first spouse to die doesn’t use the full $15 million exemption, the surviving spouse can claim the leftover through a portability election. This requires filing a complete Form 706 for the deceased spouse even if the estate is well below the filing threshold, and it’s irrevocable once made.⁹

If you miss the normal nine-month deadline, Revenue Procedure 2022-32 lets executors file a late portability election on Form 706 any time within five years of the decedent’s death, provided the estate wasn’t otherwise required to file. Write “Filed Pursuant to Rev. Proc. 2022-32 to Elect Portability under section 2010(c)(5)(A)” at the top of the return.⁹ Surviving spouses often assume no filing is needed because the first estate is under the threshold, and portability gets missed as a result.

Reporting Values to Beneficiaries on Form 8971

Executors who file Form 706 must also file Form 8971 and furnish Schedule A statements to each beneficiary, reporting the estate tax value of the property they received. This locks in a consistent basis for when beneficiaries later sell the assets. Form 8971 is due 30 days after the Form 706 deadline (including extensions) or 30 days after the return is actually filed, whichever comes first.¹⁹

Step-Up in Basis for Inherited Property

When someone inherits property, the tax basis resets to the property’s fair market value on the date of death. Stock a parent bought for $10,000 decades ago and held to a $200,000 value at death has a $200,000 basis in the beneficiary’s hands. Selling it the next day at that price produces no capital gain.¹²

The step-up applies to most inherited assets: real estate, stocks, mutual funds, business interests. It also works in reverse. If property declined, the basis steps down to the lower value and the beneficiary cannot claim the loss. In community property states, both halves of community property get a full step-up when one spouse dies, which can be a significant advantage over jointly held property in common-law states.

Two categories of property are excluded. IRD items, like traditional IRA balances, keep their original tax character. And if the estate had to file Form 706, the beneficiary’s basis cannot exceed the value reported on that return — the consistency requirement enforced through Form 8971.¹²

State Estate and Inheritance Taxes

The federal rules are not the whole story. Roughly 17 jurisdictions impose their own estate or inheritance taxes, and their exemption thresholds are often far below the federal $15 million. Some states begin taxing estates at $1 million. Inheritance taxes, which a few states levy, depend on the beneficiary’s relationship to the decedent: spouses and children usually owe little or nothing, while unrelated beneficiaries can see rates above 15%. Check the rules for the state where the decedent was domiciled and any state where the decedent owned real property.

Key Deadlines at a Glance

Final Form 1040: normal April 15 deadline of the year following death; standard extensions apply.⁶
Form 1041: 15th day of the fourth month after the close of the estate’s tax year (April 15 for a calendar-year estate).¹⁴
Form 706: nine months after the date of death, with a six-month automatic extension available on Form 4768.¹⁸
Form 8971: 30 days after the Form 706 deadline or 30 days after the return is filed, whichever is earlier.¹⁹
Late portability election: within five years of the date of death, if the estate was not otherwise required to file Form 706.⁹

Penalties and the Representative’s Personal Liability

If the estate owes tax and doesn’t pay on time, the IRS charges 0.5% of the unpaid balance each month, up to 25%, plus interest.²⁰ File on time even if you can’t pay in full. The failure-to-file penalty is much steeper.

If the decedent or estate had a clean compliance record for the prior three tax years, the IRS may waive a failure-to-file or failure-to-pay penalty under its first-time abatement program. The same type of return must have been filed (if required) each of those three years, with no penalties. You can ask by phone or in writing.²¹

The IRS generally has three years from filing to assess additional tax, six years if a return understated income by more than 25%, and no time limit for fraudulent or unfiled returns.²² Keep copies of every filed return and the supporting records until the applicable window closes.

A personal representative who distributes estate assets before all tax liabilities are settled can be personally on the hook for the shortfall. To get formal protection, file Form 5495 asking the IRS to discharge you from personal liability. The IRS has nine months after the request (six months for a fiduciary’s request) to respond; once that period passes or any amount the IRS determines is owed has been paid, you are protected from later-discovered deficiencies. For income and gift taxes, wait until those returns are filed before submitting Form 5495. For estate tax, you can attach it to Form 706 or file it separately within three years of the Form 706 filing date.²³

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Internal Revenue Service. About Publication 559, Survivors, Executors and Administrators
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Office of the Law Revision Counsel. 26 USC 6903 – Notice of Fiduciary Relationship
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Internal Revenue Service. About Form 56, Notice Concerning Fiduciary Relationship
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Internal Revenue Service. Information for Executors
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Internal Revenue Service. File the Final Income Tax Returns of a Deceased Person
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Internal Revenue Service. How to File a Final Tax Return for Someone Who Has Passed Away
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Office of the Law Revision Counsel. 26 USC 6013 – Joint Returns of Income Tax by Husband and Wife
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Internal Revenue Service. Filing a Final Federal Tax Return for Someone Who Has Died
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Internal Revenue Service. Instructions for Form 706
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Internal Revenue Service. Publication 559 – Survivors, Executors, and Administrators
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Office of the Law Revision Counsel. 26 USC 691 – Recipients of Income in Respect of Decedents
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Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent
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Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1
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Internal Revenue Service. Forms 1041 and 1041-A – When to File
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Internal Revenue Service. Instructions for Schedule K-1 (Form 1041)
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eCFR. 26 CFR 1.643(a)-0 – Distributable Net Income; Deduction for Distributions; In General
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Internal Revenue Service. Estate Tax
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eCFR. 26 CFR 20.6081-1 – Extension of Time for Filing the Return
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Internal Revenue Service. Instructions for Form 8971 and Schedule A
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Internal Revenue Service. Failure to Pay Penalty
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Internal Revenue Service. Administrative Penalty Relief
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Internal Revenue Service. Time IRS Can Assess Tax
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Internal Revenue Service. Form 5495, Request for Discharge From Personal Liability Under Internal Revenue Code Section 2204 or 6905