Discussion:First 1041 Return

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Discussion Forum Index --> Advanced Tax Questions --> First 1041 Return


Discussion Forum Index --> Tax Questions --> First 1041 Return

CathysTaxes (talk|edits) said:

2 April 2014
I've taken CPE on Estate Tax Form 1041, read my TaxBook and the 1041 instructions. Since this is my first return, I'm just looking for confirmation. Amounts are definitely rounded for simplicity.

Decedent died April 15 2013. Irrevocable trust received the following income:

1099-R IRA Annuity - $670,000

1099-B Sales of Securities - ST gain - $21,000

(there was also 1099-Div and 1099-Int, as well as other costs and deductions that are on Page 1).

***********************

Heirs:

Sister 55% received distribution from irrevocable trust of $275,000.

3 Nieces 15% each received distribution from irrevocable trust of $75,000.

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Page 1 of 1041:

Total Income $691,000 (plus the interest and dividends)

Deductions: Attorney Fees (etc) - $1500.

The income distribution deduction from Schedule B is $500,000.

Taxable income: $691,000 - $1,500 - $500,000 - $600 (exemption) = $188,900

Tax is $73,150

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The K1s

Sister, lines 1 and 2a, 55% of interest and capital gain.

Line 5, other business and portfolio income - $275,000

3 nieces, lines 1 and 2a, 15% of interest and capital gain

Line 5, $75,000


Am I on the right track? Thanks!

Kevinh5 (talk|edits) said:

2 April 2014
The K-1s should not be carrying out capital gain, unless this is a final year.

Kevinh5 (talk|edits) said:

2 April 2014
Have you considered a §645 election?

Have you considered the 60 day rule for distributions?

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