Discussion:1041 necessary?

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Discussion Forum Index --> Basic Tax Questions --> 1041 necessary?
Discussion Forum Index --> Tax Questions --> 1041 necessary?

Theleeb (talk|edits) said:

6 September 2008

Client deceased 8/29/07. Trust terminated upon death and willed assets to be equally divided among three beneficiaries (the rep has not done this yet).

Even though the trust bypasses propate, wouldn't I still need to prepare a 1041 for any income/gains earned by the trust assets? I know the FY would be 7/31/08...was hoping the rep would have distributed everything by then! I mean the IRS is expecting to see its due taxes from somewhere.

Once the rep distributes everything, from what I read, I would prepare a 1041 / K-1 for each beneficiaries, correct?

I've read the 1041 instructions, but I'm not clear on this.

Thanks.

Lhhesscpa (talk|edits) said:

6 September 2008

Yes, a 1041 is required for income of trust from date of death. The fiscal year end of a trust must be Dec. 31 unless a Sec. 645 election is made by the due date of the return including extensions to treat a qualified revocable trust the same as an estate. In that case the year end can be the end of any month after the date of death up to the month preceding date of death. Probate has no effect on this issue. -- Larry Hess, CPA | Albuquerque, NM

Blrgcpa (talk\|edits) said:	6 September 2008
So long as the trust has assets and is earning income, a 1041 must be filed. This has nothing to do with DOD. If a distribution of income is given the benes, each one needs a K-1.