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NJWMc
Returning Member

Reporting income on 1041

My brother lives in mom's home and niece lives there also and pays rent to the estate.  No money is being dispersed to beneficiaries. How is this reported if the expenses (insurance, taxes and maintenance) is more than the amount received?  Do I have to prepare a 706?

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tagteam
Level 15

Reporting income on 1041

A Form 706 (estate tax return) does not have to be filed unless the estate is very large (i.e., exceeded $11.4 million for decedents dying in 2019).

 

See https://www.irs.gov/instructions/i706

 

The rent should be reported as income to the estate but deductions may be limited due to personal use, assuming the beneficiaries are the parties residing in the home and paying less than fair rental value.

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1 Reply
tagteam
Level 15

Reporting income on 1041

A Form 706 (estate tax return) does not have to be filed unless the estate is very large (i.e., exceeded $11.4 million for decedents dying in 2019).

 

See https://www.irs.gov/instructions/i706

 

The rent should be reported as income to the estate but deductions may be limited due to personal use, assuming the beneficiaries are the parties residing in the home and paying less than fair rental value.

View solution in original post

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