Estate Final Return - Distribute Remaining Cash

[dustyb]

Descendant's IRA lump sum distribution went directly to their estate/EIN on a 1099-R, with withholdings taken out. Estate filed 1041, reported the income and received a small refund (because of the withholdings). No other estate expenses or income, no probate. Tiny estate and should have been handled differently. Do we need to file a final 1041 return now checking the "final return" box? How do we report the distribution of the already-taxed cash? Is that corpus now? 1041 Schedule B line 10 Other Amounts to be distributed? Would there be K-1s in this case of no expenses or taxable income to be passed? Thanks

[Anonymous_ · Accepted solution]

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@dustyb wrote:

 How do we report the distribution of the already-taxed cash? Is that corpus now? 

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You can file a final return (to close it out with the IRS), but there is actually nothing to report; the distribution would now entirely consist of corpus.

[dustyb]

Thanks. I guess technically from the IRS perspective, there needs to be a 1041 filed with the final return box checked? Or not? As you say, there isn't a filing requirement otherwise. If we did file, it sounds like it would be a corpus remainder distribution line 10 of Schedule B, then deducted a couple lines down, and no K-1 required. That sound right?

[Anonymous_]

Yes, you could file the return in that manner.

Nothing would flow through to the beneficiaries so there would be no need for K-1s.