FINAL YEAR OF FORM 1041

Forum|Forum|5 months ago
January 27, 2026
1 reply
5 views

I have a final year of an Estate, Form 1041.

There are multiple beneficiaries who want the Estate to pay the income tax on the income received in the final year and then distribute the balance after the income tax is paid and have the K-1 reflect the amount of the distribution to each beneficiary.

I can get the tax paid on the final return but the supporting schedule does not show any distribution of the corpus.

Lacerte support does not know if this can be done.

Any one experienced this situation before?

Thanks

Lacerte Tax

BobKamman

Level 15

Usually a couple questions every year from people who want to do what is not allowed. What does the estate administrator have to say about it? "Yes, I know this results in the highest amount of tax being paid, but if any of the beneficiaries realize that and sue me, I will gladly pay the difference out of my own pocket." ???

H

harveyburgerAuthor

Level 4

All of the beneficiaries and the Estate Administrator have agreed in writing that they want the tax paid by the Estate.

The only way I know around this is for two tax returns to be prepared, which I hate to do.

BobKamman

Level 15

And have you agreed in writing to sign a return that you know is incorrect?

What year is involved here, anyway? 2025? It's "final" even though there is money left over to pay the taxes? Or 2026? Maybe they want the estate to take the deduction for state income tax because they know that otherwise it will be lost because they don't itemize? Sounds like tax evasion to me. Or maybe they're afraid of higher AGI that increases Medicare premiums.

Why were the beneficiaries even asked what they preferred?

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