uncertain what needs to be filed with an estate sale

[arlo]

Husband owned house he and his wife lived in. Wife was not on the title of house. If he passed she could life in the house as long as she wants. If she sold the house it would go to the beneficiary's of will. He died in 2016. filed final tax return in 2017. House sold in 2017. Distribution to beneficiary's in 2018. Distribution is still in process. The proceeds are over the state threshold. Not sure if a 1041 needs to be filed for 2017

[taxea]

Did transfer to her on his death? Did he have a trust or just a will? Did she receive the proceeds of the house sale in 2017? What does her trust/will say?
A 1041 is done in each year that distributions are made. Do you have a copy of his 2016 1040/1041 returns?

[Burke]

Husband owned house he and his wife lived in. Wife was not on the title of house. If he passed she could life in the house as long as she wants. If she sold the house it would go to the beneficiary's of will. He died in 2016. filed final tax return in 2017. House sold in 2017. Distribution to beneficiary's in 2018. Distribution is still in process. The proceeds are over the state threshold. Not sure if a 1041 needs to be filed for 2017

Sounds like the title to the house went to the estate, with a life estate interest retained by the spouse. A copy of the will/and or trust document should confirm this. I would ask for it. This means when it was sold, the proceeds should have been payable to the estate. An estate return 1041 should be done to account for the proceeds and deductible expenses.

Scenario #2: The deed could have shown ownership passing to or owned directly by the beneficiaries, with a life estate retained by the surviving spouse. In that case, the monies should have been paid directly to them by the closing agent/attorney and Form 1041 would not be involved with this asset, since it never was an estate asset.

[arlo]

estate sale

Burke, thanks for the reply. It is as you have stated in scenario #1. He did not have a trust but because he had a estate asset he has to file a 1041? He died in 2016 and house sold in 2017 and distribution will be in 2018. What year does the 1041 need to be filed.

[Kram BergGold]

If I understand

If the Estate had no income in 2016 (after T/P death) or in 2017, then the first and last 1041 would be for 2018 when the house sold.

[Burke]

Burke, thanks for the reply. It is as you have stated in scenario #1. He did not have a trust but because he had a estate asset he has to file a 1041? He died in 2016 and house sold in 2017 and distribution will be in 2018. What year does the 1041 need to be filed.

That depends on whether you elect a fiscal or calendar year. Need to know two things; date of death, and exact date house sold. Normally, you do a 1041 for the calendar or fiscal year that it receives income. Note that distributions within 65 days after the estate closes can be treated as being made within the estate year. Did the estate terminate when the house closed? Or are there other assets?