Have a Tax Question? Ask a Tax Expert
The income details that you provided - does it belong to an estate? or is it earned in a trust?
It is an estate.
In that case you need to file Form 1041 (income tax return for an estate) and report the income on the income tax return.
Taxes will be due on the net tax income.
net taxable income.
But, for 2008 under the federal tax law it shows estate or inheritance tax unified credit is 780,000 and tax exclusion of 2, 000,000. So, why does this not apply to the 32,000 owed?
What you are looking at is whether there is any estate tax due. Estate tax is calculated on the value of the all the assets less the liabilities less the exclusion.
But, this is the income tax on the income earned on the assets in the estate
and is different from the estate tax
and hence, a filing is required until the assets are distributed out of the estate to the beneficiaries.