My mother died 3/22(no will) My sister took over the probate and liquidating assets. I received distribution check in 8/22. When should I get a schedule k-1 (form 1041)?

[scheherazade_82]

What do I do if I don't receive one? What if it doesn't arrive until after April 18, 22?

[VolvoGirl]

Ask you sister.  If you get a K-1 after you file you would need to amend.

[scheherazade_82]

Not on speaking terms, but thanks. Since she HAD to take over and refused to communicate with anyone, pretty sure that it all falls on her if she screwed it up.

@VolvoGirl 

[fanfare]

Generally, an inheritance is not taxable.

@scheherazade_82 

[scheherazade_82]

Yes, that is true. Inheritance is usually not taxed if the income tax for the deceased person was filed and paid or refund collected by the estate before the distribution of remaining funds after probate. This did not happen. The funds were distributed 8/22 and the income taxes were not done first. 

So a schedule k-1 of form 1041 is the distribution of income tax liability for the beneficiaries who received a portion of the income from the year of death.  In this case, my mother's house was sold so there will be capital gains income tax on that sale that will need to be distributed across all recipients (beneficiaries) of the proceeds.  Along with 3 months of income for Jan, Feb, and Mar.

Heaven only knows if my sister even thought to see if mom had had a chance to file her 2021 taxes before passing.  But she knows it all...  so what ever.

@fanfare 

[Anonymous_]

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@scheherazade_82 wrote:

....my mother's house was sold so there will be capital gains income tax on that sale that will need to be distributed across all recipients (beneficiaries) of the proceeds.  Along with 3 months of income for Jan, Feb, and Mar.

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@scheherazade_82 

I am sorry for your loss.

This situation could be mitigated by the fact that income received prior to your mother's passing would be allocated to her on her final income tax return (1040). 

Further, if your mother's house were sold shortly after her death out of the estate, then it is entirely possible that there will be little or no gain (maybe even a slight loss when taking selling expenses and closing costs into consideration). Note that any gain would be measured by the sales price (less selling expenses) less the basis in the house which would be stepped up to the fair market value as of the date of your mother's passing.