topic Does an estate file a seperate return? in Get your taxes done using TurboTax

Does an estate file a seperate return?

tripletdad — Tue, 26 Feb 2019 13:10:25 GMT

My wife passed away in 2017 and had a house in only her name that is currently being rented out. 2017 taxes were filed marking her as deceased and included the rental income and expenses. The estate has it's own EIN as I was told that was necessary for the estate account at the bank and the estate is still open until the house is sold. As her executor, do I need to file a separate return for the estate showing rental income/expenses or do I continue to include her on my taxes? Do I use her SSN or EIN if I file separately? What is the right TurboTax product to accomplish this and is there any specific form I need to be sure is completed or will it walk me through it?

Thanks in advance!

Re: Does an estate file a seperate return?

NCperson — Tue, 26 Feb 2019 14:04:19 GMT

a lot of your questions are dependent on who the beneficiaries of the estate are, the size of the estate, etc.

Best to find a estate attorney and a one hour discussion should give you the best guidance on the approach ; could save you a lot of headache if he/ she says a separate return is not necessary. it'll be worth the cost of the 1 hour.

As to the question of 'which product', if the estate is required to fill out a return, it's the Form 1041 that you are looking for in the product and then each beneficiary would receive a K-1. since this may only be a 1 year effort, might be worth a tax accountant as that Form 1041 is very different from the Form 1040.

Also, income reported on the Form 1041 is at a very high ta rate - max tax bracket of 37% at just $12,500 of income, so best if it's distributed to the beneficiaries via the K-1 as they will pay income at their tax bracket (AND YOU CAN DISTRIBUTE 2018 INCOME AS LATE AS MARCH 5th), so best to figure this out quickly

Re: Does an estate file a seperate return?

tripletdad — Tue, 26 Feb 2019 15:29:18 GMT

Thank you so very much! The estate attorney I have doesn't do taxes which is why I was asking here. Since the rent being charged is less than the current mortgage/heloc payments (10 year term) in anticipation of the current renter purchasing the house (30 year term) the estate is operating at a loss and therefore there is no income to distribute. I expect to hire someone next year to hopefully close out the estate and expect the total value of the estate to be less than 100k so it's not a large amount. It seems pretty straight forward for this year.

Again thank you for the direction and comments! They have been EXTREMELY helpful!