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Level 2
March 13, 2020

1041 Return for Estates

  • March 13, 2020
  • 1 reply
  • 6 views

I am filing a 1041 for an estate that has <$600 income from date of death to end of year but has deductions that would be beneficial to beneficiaries.  The taxable income is <$0.  Are there any issues with filing the 1041 and the related K-1 for the beneficiaries to receive the tax benefits of these deductions?  Thank you

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    1 reply

    BobKamman
    Level 15
    March 13, 2020

    Is it a final return?  Deductions, if they flow through to beneficiaries, are only available on termination.  

    But I'm not sure IRS has decided whether these survive as miscellaneous itemized deductions for beneficiaries.  They said in Notice 2018-61 that they are thinking about it.  Someone else might have something more recent.  Bueller?  Anyone?

    Even if the deductions are allowed, I would check with the beneficiaries on whether they need them.  If there are only a few, and none itemizes, don't waste your time or your client's money.  

    zxcv1234Author
    Level 2
    March 13, 2020

    Thank you.  This is the final return.  It would be a benefit for the beneficiaries.