Estate & Trust Tax Services in Bremerton

Possibly more than one. First, you will need to file a final individual income tax return (Form 1040) for your parent for the year they passed, covering income through the date of death. If the estate itself earns income after death, from interest, dividends, rental income, or asset sales, it may also need to file an estate income tax return (Form 1041). And if the estate is large enough, a federal estate tax return (Form 706) may be required. We help executors understand exactly which filings apply to their situation. 

Yes, and this surprises many people. Washington State has a separate estate tax with an exemption of approximately $2.193 million per person. The federal exemption under the OBBBA is now $15 million. This means a Washington resident with an estate between $2.2 million and $15 million owes Washington State estate tax but no federal estate tax. Many families in Kitsap County who would not owe a dollar of federal estate tax may still have a Washington State obligation, particularly homeowners, business owners, and those with retirement accounts and life insurance. This is one of the most important planning conversations we have with clients. 

 Generally, the inheritance itself is not income to you and is not reported on your personal return. However, what happens after you inherit matters. Any income the inherited assets generate going forward, dividends, interest, rent, is taxable to you. If you inherit a retirement account like an IRA or 401(k), distributions from that account are generally taxable as ordinary income. If you sell inherited property, you may have capital gains based on the stepped-up cost basis at the date of death. We help beneficiaries understand the tax implications of what they receive. 

Most non-grantor trusts are required to file an annual income tax return (Form 1041) to report income earned by the trust’s assets; interest, dividends, capital gains, rental income, and so on. This is a separate and ongoing obligation, not a one-time estate filing. As trustee you are also responsible for issuing Schedule K-1 forms to any beneficiaries who receive distributions. These obligations continue for the life of the trust. We work with trustees to meet their annual filing requirements and understand their fiduciary responsibilities. 

 If you give more than $19,000, the 2026 annual exclusion, to any single person in a calendar year, you are required to file a gift tax return (Form 709), even if no gift tax is actually owed. The return tracks cumulative gifts against your lifetime exemption. This filing requirement is commonly triggered by parents helping adult children with home down payments, large cash transfers between family members, or business interest transfers. Clients with estates approaching $8 million should pay particular attention to gifting strategy, at that level, coordinated gifting and WA State planning become meaningful tools for reducing future estate tax exposure. 

 Yes, we regularly collaborate with estate planning attorneys and financial advisors. The roles are distinct. An estate planning attorney creates the legal documents; wills, trusts, powers of attorney. A tax professional handles the tax returns those documents generate, provides ongoing tax advisory, and helps ensure the plan is structured to minimize tax exposure. Both are necessary for a complete estate plan. We coordinate with your existing advisors and can refer clients to estate planning attorneys in the Kitsap County area when needed.