Inheritance? Estate tax?

[JT2307]

Taxpayer's mother passed in July - inheritance tax was paid and the remainder of the funds was placed into a checking account set up for her estate, a friend told them to set up an estate and they received an EIN - the siblings promptly distributed equally and closed the account.

Question - Is the distribution taxable? I don't believe so. But is there any taxable event? I know 1041 needs to be prepared since the IRS will be looking for that.

Sometimes I just second guess myself.

[Roberts]

Taxpayer's mother passed in July - inheritance tax was paid and the remainder of the funds was placed into a checking account set up for her estate, a friend told them to set up an estate and they received an EIN - the siblings promptly distributed equally and closed the account.

Question - Is the distribution taxable? I don't believe so. But is there any taxable event? I know 1041 needs to be prepared since the IRS will be looking for that.

Sometimes I just second guess myself.

Estate distributions aren't taxable to those who receive it.

[JT2307]

Thank you for the response - am I correct in thinking that since I have the EIN for this estate I should just file a return with zeros and final, since all that occurred was the funds were moved in from a personal checking account and then disbursed.

Thank you for the input - I typically don't do estate returns.

[Burke]

You don't have to file the 1041 unless gross taxable income exceeds $600, since that is the exemption amount and the tax liability would be zero. Estate distributions can be taxable to those who receive them if it involves taxable income passing through to them. If it is just principal or corpus, it is not taxed to the heirs, at least not on the federal level. I am assuming you are not talking about an Estate over the $5,000,000 exemption amount, BTW. I am guessing that the "inheritance tax" you are referring to is a state thing?

[JT2307]

there was only 100,000 left in the estate - I will not be filing a 1041 since there was no taxable income.