I am the executor for my father's estate. He was not married (parents divorced over 40 years ago). It seems like form 1041 should be very easy but I find it anything but easy. I am using TT Business 2019.
My father only had a little bit of cash in the bank, a home, and personal belongings. The bit of cash from his personal bank accounts was paid out to the Estate because he did not designate a beneficiary. The home and personal belongings were sold in 2019.
As I understand it, since there is a step-up in basis for his real and personal property, there aren't any gains or losses, so there shouldn't be any tax liability to pay on the 1041.
I'm stuck on the following items in trying to complete the 1041:
1. I received a 1099-S that shows the gross sales price of the home sale. The HUD-1 settlement statement shows a reduced amount due to seller because of the required payment of property taxes my father had deferred. The net proceeds were deposited in the Estate bank account. On form 1041, do I enter the gross sales price or the net amount received?
2. Does the bit of cash from my father's personal bank accounts get reported on the 1041 since it was paid to the Estate? If so, where is it entered?
3. Do I report (and how) proceeds from the sale of personal belongings via an estate sale? If yes, where do I enter the gross amount, cost of the sale (commission of the estate sale company), the date of sale and date of purchase (date of death, perhaps?);
4. During 2019, a partial distribution was paid to beneficiaries. Do I report this on the 1041? If yes, where? Does the amount distributed have to be less than or match the gross income of the estate? In other words, is there any accounting-style balancing going on? This is a very simple estate, not a trust, and the Will does not require distributions on a schedule. The distributions were discretionary on my part as executor since the remaining expected expenses are very small and enough reserves have been kept in the estate account to cover them. I expect to close the estate is in tax year 2020.
5. If the beneficiary distributions described above are reported on the 1041, I expect the beneficiary K-1s to have all zeros since there weren't any gains or losses. In this case, do I still generate K-1s and send them to the beneficiaries?
I'm sorry for so many questions. I have spent hours upon hours trying to figure this all out myself. I thought it was going to be easier which is why I bought TT to handle it. Thank you in advance for any help. It is much appreciated!
