Spouse Dies Dec. 1, 2005

[Unregistered]

I have never handled a deceadent return before and need guidance. Couple married 50+ years...almost 100% of the family assests are in his name - live in TX (community property state). There are over 25 1099's - accounts are spread everywhere. Will has wife as beneficiary of all assets. Will an estate return be required if wife is full beneficiary? I am looking at tabs 22 and 21 in the tax book.

Your help would be appreicated.

[Ken]

decedent return

Just file a joint return as you normally would if he were alive. Put his date of death in his signature block and write filing as a survining spouse.

Your tax program should do all of this for you if you put his date of death in the program.

I dont know of anything else that needs to be done.

[Bees Knees]

TTB, page 21-2, Form 1041 filing requirements: "Gross income of $600 or more for the tax year..."

In other words, does the estate have at least $600 in gross income? If yes, a 1041 estate tax return is due.

To answer the question, you need to determine what is estate income.

TTB, page 21-5 "Probate is the court-monitored process of administering the estate of a decedent. An estate generally requires probate if the decedent owned assets in his or her name alone that will not pass automatically after death (probate assets). Nonprobate assets are assets that pass to new owners at the decedent's death."

TTB then goes on to list examples of probate and nonprobate assets. Assets held in joint tenancy are considered nonprobate assets.

TTB, page 21-5 under reporting income. The chart shows that all income before death is reported on the final Form 1040. Income after death is reported either on the 1041, or the beneficiary's Form 1040. Income on the 1041 includes only probate assets. There is no category of nonprobate assets to report on the 1041. The beneficiary's Form 1040 handles the assets that pass directly to the beneficiary.

So in your case, if the wife gets all assets without having to go through probate, there would be no probate assets to report on the 1041, thus no gross income of $600 or more, and no need to file form 1041. On the other hand, if some of the assets have to go through probate, and those assets produce income of $600 or more, then a 1041 is required.

[Bird Legs]

Also remember the stepped up

basis, at the date of death, on any real property, or stocks, for the surviving spouse.