CA. tax deadlines this year for 1041 estate forms and some amounts on Trust

[PJhiker]

Here is my scenario. I am the beneficiary of a Trust that my brother is the Successor Trustee of. My father passed in August of 2021. There was basically a house for us to sell and split the proceeds. 

We sold the house in March of 2022 and he paid my my half. The appraisal upon the date of my fathers house was for $510,000. We sold the house for $551,000. After closing costs the Title says the amount due to the Seller is $515,188.78. 

My brother wrote me a check for $257,400.  If you multiple that by two you get $514,800. That little difference is for him and a property tax thing.

So, essentially he and would pay capital gains taxes on the $5,188.78 difference between the appraisal price $510,000 on the house upon my father’s passing and amount we received as seller at $515,188.78 correct? So we would be paying capital gains on %5,188.78 total and we would split that between us at $2,594.39 right? That does not include deductions like a $2,000 staging fee we would also split? This is all confusing to me.

Also, the tax deadline in CA. is usually April 18. And it got extended to May 15 and then October due to distorter relief for the storms in 2023. 

First I am to be provided with a K-1 form from my brother correct that breaks down the numbers above for me to enter right because the net income is over $600 and is the $5,188.78 number total and $2,594.39 for each of us? Or is the net income the entire sales amount of the house of $515,188.78?

Taking into account the dates above my father passed and when I received my half is my brother right to file the 1041 in 2023?

When does he have to file this 1041 and get me a copy of the K-1. An IRS agent lady said he has to file by May 15, 2023 because of the extensions. I read online it is still April 18. She also said if he waits until May 15 I would need to actually file for an extension for the October deadline? I have no clue what is going on. I also read he has to file by the 4th month of the tax year following something? 

Can anyone help me sort all this out? He and I have a very bad relationship and I want to communicate him with certain dates and numbers I know are true so he knows I am aware of things.

[RobertB4444]

He has until May 15th to file the return, or he can file an extension giving him until September 15th to file the 1041.  All of the information about the sale of the house will go on that tax return.  Nothing about the house sale will go on your personal return.

You will receive a K-1 from your brother once the return is filed.  That K-1 will show your share of the income and expenses for the estate.  You will enter the numbers from that K-1 form into your tax return (the K-1 input is under 'Investment Income' in TurboTax).  If there is any taxable income it will show on that K-1 and you will pay tax on it on your return.  

@PJhiker 

[PJhiker]

So he has until May 15 to file the 1041 unless he file the extension? I'm only taxed at long term capital gains rate right because I'm really only getting a taxable income of amount from the date the house was appraised at his death until we sold it? We got it appraised at $510k when he passed. We sold it later at $551k, but got $515k after closing costs. So I was told because it is an inheritance and desendant thing it is long term capital gains and in this case because I did not work in 2022 and my income is less than $41,675 which includes what I believe would be a taxable amount of $5k overall and $2,500 for me? I was told I essentially pay zero % in this case?

Where are you seeing his deadline for the 1041 is May 15?

[DaveF1006]

I am not seeing where the filing deadline is May 15. According to this State of California website, the due date is April 18. 

Yes, if your total taxable income, which includes your portion of the capital gain, is less than $41,675, you will be taxed at a 0% for the capital gains earned on the sale.

@PJhiker 

[PJhiker]

I'm still a little unclear on the due date for him to "file" the 1041. I have seen a couple April 18 dates. But, I have also been told by the IRS on the phone he can file it at the deadline of May 15 because that was the first extension date for the climate crisis in counties in CA. Others have even said he all the way until the new )ct. 16 deadline for the weather criss declared in CA. in most counties. 

People have said if he waits until May 15 or does not make that date he can file an extension until Sept. 15 to file the 1041. The IRS agent said he has until May 15 and never mentioned the Sept. 15 date as an alternative extension deadline. But, they said because it is at May 15 I would "have" to file for the October extension because I would not the K-1 in time. So confusing. LOL

Anyway I'm calling the Cal Tax board tomorrow to see if they can clarify more. I honestly don't think anyone knows!

In regards to my amounts and tax payouts. If I have no W-2 because I took off work in the year 2022 and attended to family stuff and worked on my GFs house and I only have a long term gain of the trust gains which would be $2500 roughly and only $2,000 in short term gains from tax swing trades it appears that I would have a ZERO tax liability and not need to concern myself with paying an estimated amount by April 18? I have been told regardless of all of these deadlines and extensions I'm still suppose to pay an estimated amount by April 18 right? But, another person here and other places with my amounts I don't need to worry about paying any estimated amount by April 18 because of the small amount and them being long term and short term capital gains. Is that correct?

[ThomasM125]

If you don't have any tax then you don't need to make an estimated tax payment. It doesn't cost anything to file the extension for the trust tax return Form 1041 and it is just a one page form, so you can file it just to make sure you aren't late filing the tax return. Here is a link to the extension Form 7004:  Form 7004  and the instructions that include a mailing address:  Form 7004 instructions