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    Estate returned

    I need your help to complete this form because this is the case of a priest friend of mine who died in 2018, he did not leave a will but he had in his retirement account 51,000 dollars that the state has already given to his sister as a representative. This happened last year but no tax was ever filled out. He was ill for over 3 years so I don't think he was receiving money from the Church, besides disability.

    I create 1041 and they are giving her back the 5000 that they took out of the taxes, but my question is that if I create the k1, she will have to pay taxes on this or should I create 706 skipping taxes in the transfer to avoid it.

    #2
    Yes, she will have to pay the tax, and the $5K can be disbursed to her as well to do so. A Form 706 will not escape the taxes. It probably isn't even required.

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