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Lane
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3700
Experience:  Providing Financial & Tax advice since 1986
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Im filing form 1041 Estate Income Tax for 2011 tax year. We

Resolved Question:

I'm filing form 1041 Estate Income Tax for 2011 tax year. We had a constructive income receipt from 401K pension plan in 2011 although in reality the pension income came to the estate and was distributed to the beneficiary in 2012 tax year. Can I claim income distribution deduction on my 2011 Estate Income Tax, Form 1041?
Submitted: 9 months ago.
Category: Tax
Expert:  Lane replied 9 months ago.

Lane :

Hi, you kind of have a catch-22 there ... From the Estate's perspective, you're probably fine, as the reporting from the Q-Plan is 2011 reporting, and you're showing a deduction on the 2011 return ... BUT the K-1s are dated 2012 (and will be reported by the bene's on their 2012 return?

Lane :

There's always going to be a mis-match there

Lane :

K-1s should be dated the same as the return where distributed

Lane :

do you possibly have an overlap of tax years?

Lane :

estate having something other than a calendar tax year? that could do it

Customer:

This is actually amended return. The K-1 will also have to be dated 2011. Also, beneficiary will have to report the amount on her 1040 for that year as well

Lane :

Ahhh, YES, then you're fine ... if it's distributed , it's definitely a deduction

Customer:

I'm just not sure if I can take the distribution deduction, since the distribution actually occurred in 2012

Lane :

no you must treat it as a 2011 distribution ... for all the reasons you just mentioned

Customer:

Is there any IRS Reg. that would support this opinion?

Lane :

that's the ONLY way you won't get a kick-out from the IRS system somewhere

Customer:

What would be the reason they would kick out my amended return?

Lane :

I don't thing you'll find a procedure ot notice or treasury reg for something with this SPECIFIC situation ... there might be a PLR (Private Letter Ruling somewhere) ...oint but this is really fairly straightforward ... from a procedural (tax ADMINISTRATION) standpoint ... you have...

Lane :

a 2011 1041 distributing on a 2011 k1 and a taxpayer beneficiary that will report this as 2011 income

Lane :

AND a 1099-R from a qualified plan date 2011 as well

Lane :

sorry "dated

Lane :

thats the only choice you have

Customer:

Yes, the 1099R is dated for 2011

Lane :

you really have no choice 2011 distribution from a qualified plan, that has to be reported on a 2011 1041 and deducted on that 2011 1041 with coinciding k-1s (dated 2011 of course) with taxpayer beneficiaries reporting on their 2011 return

Lane :

that's how you'd get this right

Customer:

Do I have to amend the beneficiaries 1040 exactly the same time, or can I amend it with a slight a delay? I need to get a refund from 1041 first, before I pay it on my 1040

Lane :

As long as you're under the three year statue of limitations for refund purposes your fine .. you can go back as far as needed (but for refund purposes, there is a three year statute)

Customer:

Ok. Great

Customer:

Is there anything else that I should be aware in my situation?

Lane :

I think you have your arms around it... again what youre really trying to do here is having everything match up in the system ... from a tax law standpoint you really have to do it this way .. and the IRS matching program is going to look to match K-1s, 1099's, 1041's, 1040's etc all by tax year and tax ID ... You're there..

Customer:

Thank you so much for your help!

Lane :

You're very welcome

Lane :

If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.


HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.

Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3700
Experience: Providing Financial & Tax advice since 1986
Lane and 10 other Tax Specialists are ready to help you
Expert:  Lane replied 9 months ago.
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