personal residence on Form 1041

[Vette23]

I am executor of my mother's estate which only includes a personal home. I am preparing the form 1041, is there a place to include the home on the form or is this only listed when the home is sold (sold in 2025). No distributions have been made to my (12) siblings. 

Second, do I have to list all 13 beneficiaries on this initial return as there should not be any inheritance tax to them.

[DavidD66]

An income tax return is required only if the estate generated more than $600 in gross income.   If there was no income, you don't have to file a Form 1041 for 2024.  You will have to file Form 1041, U.S. Income Tax Return for Estates and Trusts to report the sale of the house.  

[M-MTax]

The home would be listed on the 1041 in tax year in which it is sold (note that estates can use a fiscal year).

Also, note that estates do not have file a 1041 unless they have $600 or more in income for the tax year. 

See https://www.irs.gov/instructions/i1041#en_US_2024_publink1000285942

[Vette23]

Thank you so if I am understanding, I do not have to file the 1041 this year, but should be ready to file it next year as the final estate return noting the sale of the residence and the distributions?

[Vette23]

Upon receiving my EIN, the letter indicated I had to file form 1041.  I thought I had to file the initial return and then the final next year as the house was just sold.  Also, would the home be listed as income to the estate even thou it was sold a year and a half after my mother's death.

[M-MTax]

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@Vette23 wrote:

........I do not have to file the 1041 this year, but should be ready to file it next year as the final estate return noting the sale of the residence and the distributions?

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That is correct. However, if the estate is terminated earlier, then the return should be filed by the 15th day of the 4th month following the close of the tax year.

See https://www.irs.gov/instructions/i1041#en_US_2024_publink1000285977

[M-MTax]

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@Vette23 wrote:

Also, would the home be listed as income to the estate even thou it was sold a year and a half after my mother's death.

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Yes, it would still be income to the estate.

[M-MTax]

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@Vette23 wrote:

Upon receiving my EIN, the letter indicated I had to file form 1041.

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That is the standard letter sent by the IRS when an EIN is issued. It is simply assumed that a return needs to be filed, but that is not the case here (or always).

[Vette23]

So form 1041 do not file the sale filings as tax returns? I just received the proceeds from the sale of the home and planned to distribute them but should I wait until I file form 1041 to see if there are taxes owed?  

[Vette23]

Thank you. I wish they wouldn't do that automatic generating of info as I have been scrambling to get social security info for the beneficiaries as they wanted the return within two weeks of obtaining the EIN. 

Also, would I be able to close out the estate shortly after distributing the proceeds of the sale of the home or should I wait to distribute funds to see if there are taxes owed on the proceeds of the sale of the home.

[M-MTax]

Not sure what you're asking.

You report the sale on Form 1041. You know your selling price less selling expenses (or should) and you now only need to subtract the basis from that net sales price to determine whether there is a gain or loss. Note that the basis would be the fair market value on the date of death.

You can pass through a gain or loss on the sale of the home on the final 1041 to the beneficiaries.