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Who must file:
Decedent's EstateThe fiduciary (or one of the joint fiduciaries) must file Form 1041 for a domestic estate that has:1. Gross income for the tax year of $600 or more, or2. A beneficiary who is a nonresident alien.
Notice it says "Gross Income", not Gross Taxable Income or Gross Income subject to Tax.
Exempt-interest dividends are often associated with mutual funds that invest in municipal bonds. While exempt-interest dividends are not subject to federal income tax, they may still be subject to state income tax or the Alternative Minimum Tax (AMT).
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