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Form 1041 Estate filing w/ 1099 income

Forum|Forum|4 years ago
April 12, 2022
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I'm filing Form 1041 on behalf of my late partner's estate, as court-named administrator.

The estate was created in 2021 w/ tax ID. (I previously filed his final 1040 for 2020, the year he died)

I'm using TT H&B, 'cuz it's the only version with Form 1041.

*MY QUESTIONS*

- Named file: Can I create form 1041 from the *desktop* version of TT H&B as a separate named file? (so far, I can pull up the form, but can't save it)

- E-file? Can I e-file it (with e-payment for taxes due drawn from the estate checking account) thru TT?

- Income: The only income is a 1099-MISC for his final paycheck (issued in 2021; taxable) and a 1099-G (state tax refund)

I know to enter them on Lines 8 & 9, but does a state tax refund even need to be reported?

- Deductions: Can I enter all atty. fees incurred in the creation of his estate as a deduction, even though some were paid by me personally, then re-paid from the estate after its creation in 2021? (Yes, I have the lawyer's bills) OR, am I limited to those paid directly by the estate to the attorney during calendar year 2021?

Note: this is the only year with taxable estate income, therefore a one-and-only filed 1041, and I'm checking both 'Initial Return' and 'Final Return' boxes.

Any guidance appreciated. I'm adamant about not paying gobs of money to a tax attorney, for something seemingly so simple. That is, after all, why we use TT! And thanks for reading.

Best answer by M-MTax

Re refunds as reportable income: Got it. Thanks much.

Re legal fees as deductions: I believe I can at least deduct court filings fees, cost of death certificates, etc.

I'm just not sure why any legal expenses (including drafting court filings) wouldn't be equally deductible.

Those legal expenses are deductible if they are of the kind an estate would have to pay.

M-MTax

The H&B s/w doesn't have form 1041. You can efile a 1041 with TT Biz and use a bank account for payment.

The state refund is income to the estate and has to be reported. Attorneys fees paid by the estate are deductible even if the estate reimbursed you for the fees you paid.

H

haruAuthor

Thank you. I regrettably assumed Home and Business was what I needed, not a separate Business CD. And I'm not paying for an even more expensive version. I found a fillable form on the IRS site. My bad.

However, I only used to standard deduction for his final tax return. While most refunds and 1099-G is reportable, another Turbo Tax forum reply says:

It is not necessary to report the amounts if, in the previous year, you:

did not benefit from deducting state income tax, or
took the standard deduction instead of itemizing your deduction

Will include all legal expenses, though, and appreciate the input

V

Vanessa A

Does the estate only have income from tax refunds? If so, and the standard deduction was taken you would not need to report the refunds as it is not taxable income. It has already been taxed.

If there is no other income, then you would not need to file a return. If there is no income, the legal expenses (depending on the type may or may not be deductible) have nothing to be deducted against.

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