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    Transfer of Overpaid Tax

    Trust, Form 1041, decedents estate, final 1041, is being filed late. Year ended 12/31/04.
    The executor made an estimated tax payment for the trust during the year.
    All income distributed to the beneficiary on K-1, therefore, no tax due on the 1041.
    This creates an overpayment for the 1041.
    Question: can this overpayment be transferred to the beneficiary, just one beneficiary, to be taken on the 1040 for the year 2004?
    If so, how would this be done?
    Thanks. With all the brains on this board, am sure someone will come up with a very original suggestion of some kind.
    Sarcasm aside, I do appreciate all the intelligence that is reflected in the responses on this board.

    #2
    K1

    Line 14a on the Form 1041 K1 says:

    Payments of estimated taxes credited to you

    I believe this line is for your circumstance. Now, will they still get a letter saying they overstated their estimated payments on the personal return? I wouldn't be surprised!

    Comment


      #3
      Form 1041T

      To transfer estimated tax payments credit, for the final year, to the beneficiaries, Form 1041T must be filed either with the Final 1041 or seperately. It must be filed by the 65th after the close of the 1041's tax year.

      It must be reported on line 14A Sch. K-1.

      Comment


        #4
        Dmj4 - 1041t

        This works if the 1041T is filed within 65 days of the end of the year.
        In this case, however, it is more than 65 days. The year ended 12-31-04. The final 1041
        is just now being filed.
        How would you handle this?
        Thanks for all the responses. They are very much appreciated.

        Comment


          #5
          choice

          It says the personal representative can choose to transfer to the beneficiaries the credit for estimated tax payments. To make this choice the 1041 T must be completed. It sounds to me like it is past time for the "choice" to be made. I believe the personal representative will just have to receive a refund. She/He can just divide the refund based on % to each beneficiary.

          It could be filled out and sent in and just see if the IRS will accept it and NOT send a refund, but that may just slow the refund down, needlesly.
          Last edited by dmj4; 09-28-2005, 09:35 AM.

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            #6
            dmj4

            Thanks for the response. Believe I will go ahead and file the 1041T for the transfer
            and see what happens.

            Comment


              #7
              I would because it is an overpayment of tax.

              If filing the 1041T is more in line with what you are wanting/needing to do, I would try it. If the return is going along with the form, then the refund will come if they choose to reject the 1041T. We have all had situtions between beneficiaries that make one choice seem to be by far the most workable.

              With the accepted form 1041T the estimated tax payments allocated to the beneficiaries on an estate that terminted on 12-31-2004 should be treated as having been paid on Jan. 15th (or whatever the date was) 2005.

              I think it is possible they will accept it because it is an overpayment of tax.

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