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Simple English definitions for legal terms
expenses of administration
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A quick definition of expenses of administration:
Expenses of administration are the costs that an administrator incurs while managing an estate or business. These costs can include fees for lawyers and courts, as well as overhead expenses like paying for officers, accounting, and IT staff. These expenses can be deducted from the estate's income, reducing tax liability. In a business, these costs benefit multiple units and are evaluated within each corporate unit.
A more thorough explanation:
Definition: Expenses of administration, also known as administration costs, are the necessary expenses incurred by an administrator in managing an estate or a business. These expenses can be deducted from the estate's income, which reduces the tax liability.
Examples: Examples of expenses of administration include court fees, attorney fees, and other costs associated with managing an estate. In the case of a business, expenses of administration may include salaries paid to officers or directors, accounting fees, and IT staff salaries.
Explanation: When someone passes away, an administrator is appointed to manage their estate. The administrator incurs expenses in carrying out their duties, such as paying for legal fees and court costs. These expenses can be deducted from the estate's income, which reduces the amount of taxes owed. In the case of a business, expenses of administration are the costs associated with running the company, such as paying for salaries and other overhead costs. These expenses benefit multiple units of the company and are evaluated within each corporate unit.