Decedent's estate going to Non-Profit

[dgarcia]

Preparing a 1041 of which the decedent has left entire estate to 3 non-profits (universities). My question is how this is handled as far as K-1's. She only had a will. She had some dividends and capital gains in 2018 after death but the largest part of the estate is her house which was sold in 2019 and the remaining 2 million in stock also sold in 2019 with the stepped up basis. Do these charities receive a K-1?

[Anarchrist]

The charitable deduction is put on Sch A on page 2 and line 13 on page 1. No K1.

[JON]

If the charities are the only beneficiaries does it make any difference if K-1s go to them or not?? I have heard preparers argue both ways and more confusion on when charities and Non charities are mixed as beneficiaries.

[Burke]

I have always sent them the K-1's whether they are the sole beneficiary or one of several. If they have to report any income depends on their formation, financial situation and charter, but that is their issue, not the estate's. And you have no way of knowing their tax situation. It is not up to the executor to determine if it is taxable or not on the other end. (An individual also may not owe any tax on income via a K-1 depending on his/her circumstances.) I am reading the OP when he says "entire estate" to mean these are not specific bequests of certain amounts, and that it is the rest and residue of the estate after all expenses have been paid. Schedule A is used only when certain amounts are permanently set aside and paid from gross income of the estate/trust as specified within the governing document (will). Hopefully, the preparer has a copy of that governing document at hand.