Several posts here suggested to have the estate pay the tax due on the $2,900 1099-DIV income. Treas. Reg. §1.662(a)-2 specifically prohibits that as the income was distributed in 2023. But then it could be totally irrelevant as the legal and accounting fees, property taxes, etc. paid in 2023 probably exceeded the $2,900 income. On top of that, the estate has a $600 tax exemption.
26 CFR § 1.662(a)-2 - Currently distributable income. | Electronic Code of Federal Regulations (e-CF...
Also mentioned was IRD. IRD is totally irrelevant since your parents passed away in 2020 and we are now concerned about a 2023 Fiduciary income tax return. Besides, IRD only adds to taxable income.
Do make sure you file the 2023 final Form 1041 and the state equivalent fiduciary income tax return ASAP. The executrix is personally liable for the tax, if any.
Any late filing and late payment penalties are based on the income tax due. If the profession fees paid and other deductible expenses exceed the $2,900, then there will be no penalties for filing late.
If you're not comfortable preparing the fiduciary tax return using TT Business, then hire a knowledgeable CPA or EA to prepare them. It's well worth the headaches. Good luck!
