Administrator's Fee

[Christian]

Is the administrator's fee for a decedent's estate subject to self employment tax ?

[jklcpa]

Is the administrator's fee for a decedent's estate subject to self employment tax ?

Is your client in the business of being an estate administrator?

[Christian]

No she is not in the business. This is likely a one time event. My understanding is fees such as these on a continuing basis are subject to self employment such as a bank director but not an individual serving in this capacity very infrequently.

[joanmcq]

No, not subject to SE. But if the fee is in box 7, be prepared for the CP2000.

[Christian]

I'll try to avoid that by noting it as a one time fee.

[grandmabee]

it won't matter you will get a letter . I am dealing with one now from 2010. I wish the estate's would just put in box 3 instead of 7 then there would be no computer match problem.

[kcjenkins]

Personal representatives. All personal representatives must include in their gross income fees paid to them from an estate. If you are not in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on Form 1040, line 21. If you are in the trade or business of being an executor, report these fees as self-employment income on Schedule C or Schedule C-EZ (Form 1040).

[Ranger]

If box 7, you can report on C and then subtract back out as other expense noting that is properly reported on line 21. Eliminates CP2000 and saves the client from cardiac arrest.

[RitaB]

If box 7, you can report on C and then subtract back out as other expense noting that is properly reported on line 21. Eliminates CP2000 and saves the client from cardiac arrest.

This is exactly what I would do, saves everybody a lot of grief. And we don't need no cardiac arrest up in here.