Estate1041 gross income test

[Flipper07]

Requirement for filing an Estate Form 1041 is Gross Income of $600 or more!  If an estate had no interest or dividends or other income except a car was sold for $6000.00 and had a FMV of $7000.00 incurring a loss of $1000.00.  Is that $6000 considered gross income even though the transaction is a loss? Trying to determine if a 1041 needs to be completed.

Thanks

[RobertB4444 · Accepted solution]

Yes, that $6000 would be gross income for the estate.  The IRS has no way of knowing what the fair market value was unless you report it.

However, there is no reporting requirement for the sale of a personal vehicle.  If the estate owned the vehicle then you'll have to file a 1041.  If the vehicle was transferred to the heirs prior to the sale then the heirs would have no reporting requirement for the sale of a personal vehicle.

@Flipper07