Thank you to everyone for the help. I’ve spoken to a few CPAs and they say that distributing capital gains income, in my case, to beneficiaries is ok.
I’m wondering if I could do this for canceled debt income as well? I have not received 1099Cs for all of the debts. One of the debts, the larges at 65k, was agreed settled in the previous fiscal year of the estate. The income from the canceled debt, I’m guessing, would be reported in Jan 2022. So I’m wondering if I could distribute the income from that debt in the final tax year of the estate to the beneficiaries as the debt would most likely not be reported until Jan 31st 2022. The income that would be distributed would come from the principal of the estate, but would be income that would have been distributed to pay creditors, had it not been forgiven.
