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Would the estate pay self employment taxes on the income…

Richard,Would the estate pay self...
Richard,Would the estate pay self employment taxes on the income before the beneficiaries are determined? For instance if it takes the court 2 years to say the parents are the beneficiaries. How is that income taxed on the 1041 in the meantime?
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1/9/2018
Richard
Richard, Tax Attorney
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Yes....the estate would pay all the taxes, including self-employment taxes. The estate would file its own income tax return...the 1041. The tax brackets for an estate are as follows:

Tax Brackets for 2017: Estate Income Tax and Trust Rates Marginal Rate Estates & Trusts 15% 0–$2,550; 25% $2,551–$6,000; 28% $6,001–$9,150; 33% $9,151–$12,500; 39.6% Over $12,500

Richard
Richard, Tax Attorney
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Customer reply replied 1 month ago
Thanks and the estate cannot take a distribution deduction until the beneficiaries are named by the state of NJ correct?
Customer reply replied 1 month ago
Richard,Just want to confirm. There is no deduction for distributions of income to beneficiaries on the estate return until they are named a beneficiary by NJ Probate, correct?

You could, if you wanted to, have it flow through to the beneficiaries via a K-1....would likely result in lower tax bracket.

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