State issued 1099G in 2009 for 2008 refund for decedent's final 2008 1040 (taxpayer died 10/15/08). Estate 1041 is on extension. Taxpayer itemized on final 1040 and received a tax benefit for the full amount of the state income tax. Normal rule for individual 1040 would be that the state refund is taxable on the 1040 for the following year (TTB 21-10 says "gross income for an estate or trust is determined in the same manner as gross income for an individual". So I assume the refund is taxable on the estate's 1041 ? Any 1041 prepares have other thoughts?
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