Can an estate deduct donations made by the executor?

The governing document and fiduciary income tax rules determine whether a charitable deduction is allowed. When preparing the return, charitable gifts at death can reduce the taxable estate when made to qualifying organizations and properly documented. How the item is taxed can depend on beneficiary status, ownership, timing, basis, and whether the amount is principal or income. For tax reporting purposes, federal and state systems are separate, so the executor or beneficiary should check the current rules that apply in MI and any other state connected to the estate.