Discussion:Deductible funeral expenses on form 706
From TaxAlmanac
Discussion Forum Index --> Advanced Tax Questions --> Deductible funeral expenses on form 706
Discussion Forum Index --> Tax Questions --> Deductible funeral expenses on form 706
| 15 October 2007 | |
| I'm preparing a estate tax return form 706. the family of the deceased held a luncheon after the funeral. Is this a deductible expense? What about the flowers purchased for the wake? i'm thinking it is not deductible but just want to check. thanks. | |
| 15 October 2007 | |
| no. Trust agreement specifies that trustee has the power to pay all expenses of the trust. the trust agreement doesn't specify what constitutes funeral expenses. | |
| 15 October 2007 | |
| An interesting case to consider:
http://www.ustaxcourt.gov/InOpHistoric/Davenport.TCM.WPD.pdf Assuming state law permits reasonable funeral expenses as a charge against the estate, the personal rep/successor trustee should be prepared to demonstrate the reasonableness and necessity of the luncheon/flowers, etc. Does PR have an itemized bill showing what costs were incurred in the luncheon? Was the luncheon immediately after the funeral w/ the same guests attending both events? Was the luncheon held in the same complex as the funeral? What events if any transpired at the luncheon (e.g., did anyone give speeches there remembering the deceased?). I believe the main thrust of Davenport was that the court needed evidence to assess reasonableness. JMHO | |
| 15 October 2007 | |
| THANKS Bengoshi-reference to that case was very informative. I do not believe the luncheon would meet the required criteria in my client's estate. However i think an argument could be made for the flowers. Thanks | |
| 16 October 2007 | |
| Thanks a million Bengoshi - the reference is perfect for a form I'm preparing. | |
| 16 October 2007 | |
| Hi I have always taken a post funeral lunch or catered meal at the home of a relative. This is common practise for almost all funerals. It has never been discussed on audit. Flowers are deductible as well without question. bye | |
| 16 October 2007 | |
| The most outrageous one I've seen fly was a case where executor paid transportation costs to Florida for all the relatives as well as the cost of buying "appropriate" clothing for them to wear to the service. | |
Death&Taxes (talk|edits) said: | 16 October 2007 |
| I had a client rent the Academy of Music in Philadelphia for his wife's Memorial, but her estate did not quite make the threshhold for taxability, even without the deduction. The State of Pennsylvania accepted it. | |
| 16 October 2007 | |
| Now i'm confused as to whether or not to deduct the funeral luncheon. Smokeytax-what are you going to do? I think i may discuss it with the executor and tell her it is a gray area and see how aggressive she wants to be.
How detailed to do describe the expenses? do you list flowers separately or do you use a catch all phrase? | |
| 16 October 2007 | |
| Hi its not a big deal. How much money are you talking about? list flowers amount list funeral luncheon and amount. bye | |
| 19 October 2007 | |
| I believe I'll deduct the entire cost as "funeral expense" - the total will only be about $1,500. The estate in question is under the federal limit, but will be subject to 16% state tax. | |
