Simple 1041

[Possi]

I never do these, but my best friend's mother-in-law died last year, and it should be ultra simple, so I volunteered.

I've looked at the instructions, so please correct me if I'm wrong:

The only income that is on the 1041 is income that came in after death.

1099R and interest statements that are in the name of the estate are the only ones included on the 1041.

The small SS statement and the little bit of 1099R and interest that were in her name (before death) added together, do not require a 1040 to be filed at all.

Is it really this simple?

[Kram BergGold]

Yes and No

You have to watch out for the fact that many months may have passed after death and before an account was transfered from the decedent's name to the estate. In this case, you must prorate the income on the decendent's 1099 and allocate the post death amounts to the estate.

[Burke]

KG is correct. You cannot always go by the 1099's and who they are reported for to the IRS. It's quite common for them to be incorrect.

[Lion]

And, the family may want you to file a final 1040 also. It'll let the SOL run in case something comes up later. You'll be sorting all the income/deductions by before and after DOD anyway, so you'll have all the numbers for both the 1040 and 1041.

[Possi]

1099 to the estate

The 1099 to the estate was definitely distributed while she was alive. I have the paystubs here.

This isn't even $11k TOTAL, interest included.

[S T]

The 1099 to the estate was definitely distributed while she was alive. I have the paystubs here.

This isn't even $11k TOTAL, interest included.

Possi, based on your last post, Just a question, and I am not best at trusts

but why does the estate have a 1099 form if it was distributed to the deceased during her lifetime - that should go on the deceased 1040 and not the form 1041 Trust as income ???

Sandy

[Possi]

I know!

I went into this blind of course. So I just plugged the income as it was reported.

I KNOW she was alive when she got that income. She died on my birthday.

If it was reported as it should have been, we would be getting her $1100 back that was withheld. As it is in the 1041 return, the estate OWES about $400.

No good deed..... right, RitaB?

[RitaB]

Absolutely

I went into this blind of course. So I just plugged the income as it was reported.

I KNOW she was alive when she got that income. She died on my birthday.

If it was reported as it should have been, we would be getting her $1100 back that was withheld. As it is in the 1041 return, the estate OWES about $400.

No good deed..... right, RitaB?

No truer words were ever spoken. And I'd enter and back out amounts with explanations in order to do both returns correctly. I'm starting to think more forms are prepared incorrectly than correctly. Love you Friend.

[Possi]

one smart cookie

That's great. You are one Smart Cookie! I'm buying you a bottle of wine next time I'm in TN! LOL

[Burke]

I went into this blind of course. So I just plugged the income as it was reported.
I KNOW she was alive when she got that income. She died on my birthday.
If it was reported as it should have been, we would be getting her $1100 back that was withheld. As it is in the 1041 return, the estate OWES about $400.

And there you are. A prime example. If she received this income before her date of death, then it goes on her 1040. What happens to the estate income then? Does it drop below $600? If so, no return is necessary. Except for the mismatch. So, yes, an in-and-out for the 1041. I can't figure out how this happened, unless the brokerage DID NOT transfer the funds into a new account. They must have just changed the SSN/EIN on the existing account, which, of course, made the 1099 at the end of the year absolutely incorrect. You can determine this by looking at the account number. If it is the same as hers last year, then that is why. You said it was a 1099R, so I am assuming it was an RMD or other distribution of only part of the funds in the account? In order to determine definitively the actual date of income earned or distribution made, you need to look at the monthly brokerage statements.

[RitaB]

Spanks

That's great. You are one Smart Cookie! I'm buying you a bottle of wine next time I'm in TN! LOL

Can't wait! And I've learned the hard way that getting corrected forms is less likely than catching a unicorn in a leap year.

[Possi]

pension plan

It was a pension. And the account number on her paystubs matches the account number on the 1099R issued to the estate. So that is exactly what they did. They changed the tax ID number, but not the account.
ugh
And this was going to be a 6-minute return.

[BOB W]

Let it be said...."there is no such thing as a simple 1041".

[Lion]

Hey, I'm going to be in TN in July for Appalachia Service Project. But, we don't drink while on the trip. I heard that sweet tea is the table wine of the south, anyway! Can I find UNsweetened iced tea in TN?

[Possi]

no kidding

I will NEVER say "simple" and any kind of tax return ever again. Ever. Again.