House sold in name and tax id of estate. House sold for a loss. 1099-S issued to estate with tax id of estate. Estate has no income. Estate distributes cash from house sale to bene's.
1. Does the estate have to file taxes even though no income and sold for loss?
a. If estate does have to file taxes, how does it report it?
b. If estate does not have to file taxes, isn't the IRS expecting something documentation due to 1099-S issued to estate.
c. If estate does have to file, please confirm if K-1's are necessary. I do not think they are because estate had no income and did not distribute income. Estate also is not passing on any type of tax obligation, etc to the bene's.
3. Do the bene's report the receipt of cash from the house sale from the estate? I do not think so because inherited cash is not reported at the federal level and the states in which the bene's live do not require it.
Is this correct?
