1041 Fiscal ending 10/31/2010 Fees Paid??

[SFBOB]

The only reason to keep the Estate 1041 return open after year ending 10/31/2010 is payment of fees in April 2011 in the amount of $25,000.00. The second year will be 100% fees and require [8] K-1 forms to pass this deduction to the Beneficiary's. Your thoughts please.

[Koss]

Your thoughts?

And you're thinking...

that it's not worth it?

Just close the estate, and the beneficiaries don't get the deduction?

Why? Because the cost of keeping the estate open may exceed the value of the tax benefit of the deduction for the beneficiaries?

Or is there something else about this scenario that I'm not seeing?

BMK

[Burke]

The estate will also have certain other administrative costs as a result of the termination in most cases. This will include fees for the final tax return (which could be a short year if all assets are disbursed prior to 10/31/11) and the 1099MISC to the fiduciary. And may include accounting fees filed with the court. That cannot be done until the estate is closed. (Note that, generally, if the fiduciary hires someone to do the accounting, the expense is paid out of his/her fiduciary fees.)

[SFBOB]

Payment of 1041 Trustee and Tax prep.

This Estate does not required court approval. It is being administered by the successor trustee. I would like to include the fees in the return [A DEDUCTION] for the benefit of the Beneficiary's.Looks like an additional 1041 year,Right? Any additional thoughts, will be appreciated. Bob

[Burke]

Yes, an addl 1041 year. You can't really go back and put these fees into 2010 when they have not even been paid yet. In some cases, the IRS will consider the estate closed if a small amt is held over to clean up some bills. But this is $25,000 and it is six months later and it needs to be passed thru to the bene's. Don't think that will fly.