form 1041 filing

[Unregistered]

Recognizing that if the estate has gross income of $600 or more in the tax year a return 1041 must be filed.

SCENARIO: Person dies september 2006. Estate representative sells estate stocks and buys treasury bills in December 2006. Nothing distributed to beneficiaries in 2006 but will be in 2007.

QUESTION: Person dies september 2006. So can more than one form 1041 be filed for the decedent's estate? One in 2006 to report the estate income for 2006 (because form 706 to be filed in 2007)

Then another fom 1041in 2007 until the form 706 is filed by June 2007? Or would the
form 706 be the vehicle to report the estate income for 2007 (along with the distrubitons to the beneficiaries)?

thank you

[OldJack]

QUESTION: Person dies september 2006. So can more than one form 1041 be filed for the decedent's estate? One in 2006 to report the estate income for 2006 (because form 706 to be filed in 2007)

Yes, an estate may have reason to remain open, such as probating assets thru court, for several years and must file a 1041 to report and pay income tax each year on taxable earnings.

[TAXBILLY]

A 1041 tax year does not necessarily end on December 31st but if you have income less than $600 it would be beneficial to file the return as of December 31st.
taxbilly

[New York Enrolled Agent]

Unregistered

QUESTION: Person dies september 2006. So can more than one form 1041 be filed for the decedent's estate? One in 2006 to report the estate income for 2006 (because form 706 to be filed in 2007)

An estate does not need to use a calendar year. If the tp died in September, 2006, you can use a tax year beginning on the day of death and ending on August 31, 2007 (you can actually use the last day of any month providing you do not exceed a year).

Thus, you MIGHT be able to wrap up everything in one year with the 1041 being both an initial & final return in one. But as noted above you may file additional years if necessary to finalize the finances of the estate.