Estate income??

[schwye]

Two sisters owned land together.....one is deceased so I have been filing 1041 for 3 years. 2nd sister is now in nursing home and is "spending down" money. She "gave" $2300 to the estate. Does estate have to claim as income? Can 2nd sister claim as an expense and how or where? Thanks all!

[OldJack]

Why are you filing a 1041 for 3 years? Is the land held in an irrevocable trust? Is the estate in probate and the land ownership in question?

[schwye]

Still own land

Land is rented out so that is where 2nd sister gets her income. Family will most likely sell land this year. This one is very confusing to me!

[dsi]

Correct me:
1. 2 sisters own land jointly together?
2. for 3 years, while both sisters were still living, you filed a1041?
3. 1 sister dies, surviving sister now derives her income from the land that the 2 sisters jointly owned, but is now owned 100% by the surving sister?

[schwye]

I'll try...

Land was owned 50/50 while both were living now 50/50 estate & 2nd sister. 1st sister died 4 years ago. 2nd sister still living. Family does not want to sell land until 2nd sister has passed as she receives rental income from the land. 1st sister's "will" stated all rental income to 2nd sister while living. All assets to be split among 7 children when 2nd sister dies.

1st sister has many investments that are not to be sold until farm land is sold as the interest from these helps pay property taxes.

I am fully admitting I may be in over my head on this one. I have prepared returns for 12 family members for several years. This year I may need to redirect......thank you for all input or advice about redirection.

[OldJack]

A "will" by definition must be taken to probate court usually within 1 year of death or it is no longer valid. If the "will" sets up a trust... again there is no trust unless the will has been thru probate court.

If there was actually a trust and the land was titled in the name of the trust, then you have a 1041 tax return to file. Transfer of ownership of an asset can't just be put-off indefinitely because that was the wish of the dead person.

An "estate", filing 1041, can't remain open for no reason. The estate trustee must determine ownership and distribute the assets of the estate as soon as reasonable.