Date of Death 2017
Only asset was home which was sold in April 2018 for a LOSS
South Carolina required probate
PR /Executor became ill and died in 2019
Next Executor has paid all the expenses and distributed SOME of the funds from the house sale in 2019 / 5 beneficiaries
continued paying legal and probate fees in 2020 but is trying to close the Estate and distribute the balance of $20K to the 5 bene/
Question/
File all years / 2018/ no income / no distribution
FIle 2019 with distributions and no income to bene but a LOSS on the house? can they now take it in 2021
just file a 2019 when sale occurred and issue 2019 K-1? with loss even if the bene can't take it?
I have a feeling the probate court will want a final return in 2021 when the balance of the funds is distributed?
Any feedback or assistance is appreciated!
You should seek guidance from a local tax and/or legal professional.
However, you should most likely file a return for the year of the sale to record the loss. Nevertheless, the loss will remain with the estate until the final return is filed (at which point any recognizable losses can be distributed to the beneficiaries).
You do not have to file for any tax year during which the estate had gross income of less than $600.
See https://www.irs.gov/instructions/i1041#idm140229151947712