I received a 2018 tax refund for my father’s estate in 2023. I am the fiduciary. He passed away 3 years ago. I never had to file an estate return because the estate had no money until now. The taxable interest generated from 2018 - 2023 is greater than $600 so the estate is required to file. A living trust is the beneficiary. But trust accounts were long since closed so the money remains in an estate account for now. I got an EIN and filed an estate return and paid tax on the interest. But now I’m wondering: Can the estate hold the money, pay any expenses and taxes, and distribute the remaining money to the trust in 2024? Or should it have been distributed right away to the trust? It seems to me that either way works as long as the money is tracked and taxes are paid accordingly. I asked my accountant, but he is currently unavailable, so I would like some other knowledgeable tax professionals to weigh in.
