Executor fees (non-professional) counted as "earned" income?

[ruby4728]

I have been reading conflicting information on this topic. I am claimed as a dependent on my mother's tax return. During the year, I received a commission for serving as a non-professional executor to an estate. My question is: Does this fee/commission count as earned income?

Because I am claimed as a dependent, my standard deduction will be based off my "earned income." This is my only income this year, so if it is counted as earned income I will receive a substantial tax break as it will increase my standard deduction. If it is not earned income, I will have to pay higher taxes.

Some previous posts on here indicate that it is not earned income. Some websites indicate that it is earned income (ex. http://www.eldercarelawyer.com/articles/estates/compsensation-for-executor.html - Second to last paragraph/ https://www.avvo.com/legal-answers/are-fees-paid-by-an-estate-to-an-executor-subject--210763.html - answer 1).

No 1099's were issued.

[JulieH1 · Accepted solution]

The IRS does not consider non-professional fees to be earned income.

Earned income is an IRS term for income that is obtained by participating in a business or trade.  Because you do not have a business or trade as a non-professional,  you do not have to pay self employment taxes but it also means your income is not earned income.

Your fees are income and must be included on Line 21.

This is directly from Publication 559 from the IRS

"All personal representatives must include fees paid to them from an estate in their gross income. If you aren't 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 your Form 1040, line 21. If you are in the trade or business of being an executor, report fees received from the estate as self-employment income on Schedule C, Profit or Loss From Business; or Schedule C-EZ, Net Profit From Business, of your Form 1040."

https://www.irs.gov/publications/p559

[ruby4728]

Thanks Julie. Could you take a look at the links I posted? Is the guy wrong or am I not seeing something? I am a little confused with the conflicting information.