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Category: Tax
Satisfied Customers: 12035
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I am filing an estate return for a mother who passed away.

Customer Question

I am filing an estate return for a mother who passed away. She named 6 individuals as beneficiarys of the will. On the estate return do I mark it as a simple estate return? Also since its an inheritance, would I need to add K-1's for the 6 individuals or would just the estate pay the tax due and no k-1s are issued?
Submitted: 10 months ago.
Category: Tax
Expert:  Lane replied 10 months ago.

Hi. My name's Lane. I can help you here.


If you distribute all of the trust's accounting income in the Distributions section, the trust is a simple trust and, accordingly, mark the "Simple trust" box on Form 1041.


And you WILL want to do that if there are any items of income at all, (interest, dividends, rents, capital gains fro the sale of an asset, etc).


This is becasue EITHER the trust/estate OR the beneficiaries pay tax on these items, and trust/estate taxes are MUCH higher.


Trust rates get to 39.6% at around 12,000 of income, but an individual doesn't get to that rate until they have $400,000+ of income.


So yes, taking the distribution deduction for any taxable items of income and passing them out via the K-1 so that there is likely more left FOR the beneficiaries, after taxes, is what you'd want to do.

Expert:  Lane replied 10 months ago.

Please let me know if you have any questions at all, before rating me


If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit") ... Otherwise I see no crediting for the work here.


Thank you!


I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

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