Bankruptcy Estate

[WhiteOleander]

I am doing some study about filing the 1041 for a Bankruptcy Estate. I have never had any experience with this.
I am a little confused on the mechanics of how it plays out.
Do you fill out a 1040 for the income/expenses etc. that belong to the B/R estate and then figure the tax with the chart given in the instructions for Form 1041? Then put that tax on line 44 of the 1040?
I believe that you are to attach the 1040 to the 1041 with the statement that it is attached to the 1041 and not to detach. The heading and tax liabilities and payments are all that are filled out on the 1041? It's kind of liike a shell?

Also, if the person filing the B/R cannot pay the tax due (if any) how does the IRS handle this? Does it make any difference that the person is currently in B/R?

[Roland Slugg]

You're right on course

Dear WhiteOleander

You are correct. Looks like you must have read the instructions for F-1041, but if not, be sure to read pages 11-12. The tax appearing on F-1040, line 63, gets transferred to F-1041, line 23.

The taxpayer's credits, PAL and other carryovers transfer to the bankruptcy estate, and some will be deemed used before they flow back to the taxpayer after he emerges from bankruptcy.

Regarding the taxpayer's inability to pay the tax, I would refer that question to his attorney or to the trustee.

[WhiteOleander]

Thanks very much for the info. I appreciate it.