Here is a little info on taxes and decedents.

http://www.irs.gov/pub/irs-pdf/p554.pdf

Decedents compensation for services, interest, dividends, rents, royalties,
income from partnerships, estate or trust income,
A personal representative of a decedent’s estate can be an gain from sales or exchanges of property, and business
executor, administrator, or anyone who is in charge of the income of all kinds.
decedent’s property. Under special provisions of the law, certain items are
If you are acting as the personal representative of a partially or fully exempt from tax. Provisions that are of
person who died during the year, you may have to file a special interest to older taxpayers are discussed in this
final return for that decedent. You also have other duties, chapter.
such as notifying the IRS that you are acting as the personal
representative. Form 56, Notice Concerning Fiduciary
Relationship, is available for this purpose. Compensation for Services
When you file a return for the decedent, either as the
personal representative or as the surviving spouse, you Generally, you must include in gross income everything
should write “DECEASED,” the decedent’s name, and the you receive in payment for personal services. In addition to
date of death across the top of the tax return. wages, salaries, commissions, fees, and tips, this includes
If no personal representative has been appointed by the other forms of compensation such as fringe benefits and
due date for filing the return, the surviving spouse (on a stock options.
joint return) should sign the return and write in the signa- You need not receive the compensation in cash for it to
ture area “Filing as surviving spouse.” be taxable. Payments you receive in the form of goods or
For more information, see Publication 559, Survivors, services generally must be included in gross income at
Executors, and Administrators. their fair market value.
Surviving spouse. If you are the surviving spouse, the Volunteer work. Do not include in your gross income
year your spouse died is the last year for which you can file amounts you receive for supportive services or reimbursea
joint return with that spouse. After that, if you do not ments for out-of-pocket expenses under any of the followremarry,
you must file as a qualifying widow(er) with de- ing volunteer programs.
pendent child, head of household, or single. For more · Retired Senior Volunteer Program (RSVP).
information about each of these filing statuses, see Publi-
cation 501. · Foster Grandparent Program.
If you remarry before the end of the year in which your · Senior Companion Program.
spouse died, a final joint return with the deceased spouse cannot be filed. You can, however, file a joint return with · Service Corps of Retired Executives (SCORE).
your new spouse. In that case, the filing status of your
deceased spouse for his or her final return is married filing Unemployment compensation. For 2009, you must inseparately.
clude in income all unemployment compensation you reThe
level of income that requires you to file an ceived that is more than $2,400. If married filing jointly,
income tax return changes when your filing status include any unemployment compensation received by
CAUTION changes (see Table 1-1). Even if you and your your spouse that is more than $2,400.
!
deceased spouse were not required to file a return for More information. See Publication 525, Taxable and
several years, you may have to file a return for tax years Nontaxable Income, for more detailed information on speafter
the year of death. For example, if your filing status cific types of income.
changes from filing jointly in 2008 to single in 2009 because
of the death of your spouse, and your gross income
Page 6 Chapter 2 Taxable and Nontaxable Income