Exemptions on Decedent’s Last Tax Return

When a person dies, the person’s tax return for the last taxable year should be filed.  A taxpayer’s year ends on the date of his/her death[i].  The part of the year when the taxpayer was alive can be calculated as a taxable year.

Some exemptions are available and applicable to a decedent’s final income.  The exemptions provided to an ordinary individual are available in the case of a decedent’s final returns also.  Tax deductions for personal exemptions are not reduced based on shorter tax period of a decedent[ii].  If the deceased person has contributed more than one-half of a dependent’s annual support, the decedent’s representative can claim a dependency exemption on final returns.  However, if a decedent is a dependent of another taxpayer, the decedent’s personal exemption is not allowed on his/her final returns filed.

[i] 26 CFR 1.451-1

[ii] 26 CFR 1.443-1

Inside Exemptions on Decedent’s Last Tax Return