Fiduciary return issue

[DoNTaxesNow]

I filed Form 1041 marked as "Final Return" for an Estate that was closed. (tax year-end 3/31/07). The 4 beneficiary K-1's listed a small amount of excess deductions, which are only allowed in the final year. Now - the Fuduciary has been notified that additional assets (shares of stock) have been found in the decedent's name, and the estate is being re-opened to account for and redeem the stock.
The stock shares were missed earlier by the investment broker, or company stock department, and the value has declined substantially since the decedent's date of death.

Can a 2nd tax return be filed to report this later sale of stock? Is there a standard procedure for filing another return after a "Final return" has been filed?

Thanks for your suggestions.

[cpadan]

You can file an amended 1041, use the same form and check the box for amended.
Dan

[DoNTaxesNow]

I thought of an amended return, but this 2nd stock sale will be far outside the maximum year-end for the original return.

[cpadan]

Now your situation is clearer. As long as the overall amounts reported to the beneficiaries are the same, you could probably go ahead and reported the stocks in the current year and leave the previous year alone. Other wise you will have to amend the prior K-1’s or make adjustments for them in the current year.

I don't know of any standard procedures.

[DoNTaxesNow]

Thanks cpadan.

My biggest concern is that the IRS will have closed the account since the return was marked final... or they will question the filing of a 2nd return. I don't know how long they keep the Estate accounts open after a final return is filed.

Of course, I have the beneficiaries asking if they should wait to file their 2007 tax returns, wondering if the K-1's need to be amended...

[cpadan]

My guess is that the IRS will accept the return.

So the bene's have not yet filed?

Then maybe the thing to do is to have them shred their 2007 K-1's. Then amend the prior 1041 (without the final box checked) to take off the final deductions and put them on the current (and true final) return. Each beneficiary will then only have one K'1 to mess with.

Good Luck
Dan