Hello,
I’m the personal rep of an estate. I’m wrapping selling all the assets and have begun filing two 1041s for the estate, first for a fiscal year July 6th 2020-June 30th 2021, and second short tax year for July 1st 2021-September 30th 2021. The only income that I’ve had for the estate has been canceled debt at around 75k that was reported as other income on first year 1041 and capital gains that I’m currently trying to report for the second short and final year 1041 for the estate. Can I pass through the capital gains tax to the beneficiaries to be taxed less, or is this something that only a trust can do?
If I cannot pass capital gains onto the beneficiaries, do K1s still need to be distributed during the final tax year of the estate, or could I just wait to distribute income to beneficiaries after I file the taxes and avoid reporting that income on K1s? Currently TurboTax business is showing that I’m paying capital gains tax on the home sale, but I’m still generating K1s to distribute with part II of K1 showing income to be distributed currently (line A1) as an amount, and an amount for income distribution deduction (line B1). Do these indicate taxes that the beneficiaries would have to pay as well by getting a K1. I don’t want beneficiaries to end up having to pay tax as well as the estate.
Thanks,
Appreciate your time
