Estate Applicants

An estate is a legal entity that is created because of a person's death or bankruptcy. The estate consists of the real and/or personal property of the deceased person. The estate pays any debts owed by the decedent and then distributes the balance of the estate's assets to the beneficiaries of the estate.

The following is a list of definitions for different types of estates:

Ancillary and Domiciliary Estate - an ancillary estate (real and/or personal property of the deceased person) is an estate which exists in a "foreign" state because the applicant was domiciled (resided) in another state at the time of death.

Probate Estate - is the same as an estate entity. Probating an estate in court is done to establish that the will is authentic or valid.

Bankruptcy Estate - a bankruptcy estate is a separate and distinct taxable entity from the individual debtor, when an individual debtor files for bankruptcy under Chapter 7 or 11. When a case is created under any chapter of the bankruptcy code, a separate estate is created consisting of property held by the debtor as of the commencement of the case and under certain circumstances, property acquired by the debtor and the estate after commencement of the case.

Decedent Estate - estate of a deceased person that is a taxable entity separate from the decedent. It exists until the final distribution of the assets is made to the heirs and other beneficiaries.

The type of estates that most often request U.S. Residency certifications is decedent estates.

A decedent estate figures its gross income much like an individual:

Deductions and credits allowed for an individual are allowed to the estate.

The major difference between how an individual figures income and how an estate does, is that an estate is allowed an income distribution deduction for distributions to its beneficiaries.

Income distributions to beneficiaries are taxable to the beneficiary; however, estates are treated as residents and U.S. residency certifications are issued at the estate level, regardless of whether it distributes its income.

Certification of an estate applicant requires that the applicant complete all the Form 8802 required fields, that a Penalties of Perjury statement be provided, when necessary, e.g., the request is for the current year and the estate has not filed its required Form 1041.

When an estate has met all certification requirements, issue certification using one of the EST.1041 paragraphs.