Estate return

[Roberts]

Client died right after we filed last years tax return.
He had a substantial refund owed to him but we rolled it onto his 2014 return.
Very little income on his 2014 return so he has a big refund coming.
His estate return has an equal amount of tax due pretty much.

There is no way to roll the personal tax refund onto the 1041 is there to meet their tax due?


IRS form 1310 is stupid. For the software being used, if the court recognized a personal rep, I can't efile the return but if the court hasn't recognized one, I can efile the return and the exact same person can claim the refund. Bizarre.

[BP.]

There is no way to roll the personal tax refund onto the 1041 is there to meet their tax due?

A few years ago a (not at the time) client made a payment toward what he thought would be an estate tax liability for his deceased loved one. Didn't need to file a 1041 and didn't file one, but he did get a CP080 letter asking what to do about the credit on the account.

Language from the letter:
"If you would like the credit transferred to another tax form, tax period or tax identification number: Call us at 1-800-829-0115 to give us the details of the account to which the credit should be transferred." Called and did the transfer, as the individual had a tax liability. They requested a follow up in writing.

Maybe the phone number will help you?

[Burke]

Client died right after we filed last years tax return.
He had a substantial refund owed to him but we rolled it onto his 2014 return.
Very little income on his 2014 return so he has a big refund coming.
His estate return has an equal amount of tax due pretty much.

There is no way to roll the personal tax refund onto the 1041 is there to meet their tax due?


IRS form 1310 is stupid. For the software being used, if the court recognized a personal rep, I can't efile the return but if the court hasn't recognized one, I can efile the return and the exact same person can claim the refund. Bizarre.

Unfortunately, since the 2013 refund was applied to his 2014 personal account (SSN),I know of no way to "roll" the funds internally to the Estate 1041. If the client died right after you filed the personal tax return, that would have been Feb 2014 or later, I am assuming. (No DOD given.) That means the Estate tax year began the next day. You could elect a fiscal year on the Estate tax return which would end Jan 31, 2015 or whatever the month would be ending prior to the DOD. In other words, if he died in March 2014, a fiscal tax year for the Estate would end Feb 28, 2015. Then the return would not be due until 3 1/2 months later, or June 15 of this year. Plenty of time to get the personal refund and pay the 1041 tax due. Were distributions made to the beneficiaries? If so, the taxable income should flow through to them. And, if not, you can take advantage of the 65-day rule for that transaction, which will accomplish it if it has not yet been done. That should be a better outcome than the Estate paying the tax.

[Roberts]

The Estate paying the tax isn't a problem

it is just messy to get a check and write a check for essentially the same amount. The estate will have to file a 2015 return also so it'll easily eat up the refund completely.

The 1310 is bizarre. If a personal rep is assigned, you can't efile the return but if a rep isn't assigned by the court, you can. It's an incentive to lie on the return for a rather meaningless point - refund wise.

[Burke]

The point I was trying to make was that perhaps the estate did not need to pay the tax at all. If distributions were made to the beneficiaries, it would pass to them who may be in lower tax brackets than the estate. You said he was getting a "substantial" refund and the estate was paying about the same amount.