1041 Estate Deprecation

[Stevehofwa]

If you have rental property in the estate, does the net rental income(not considering depreciation) and depreciation pass through to the beneficiary, or can the estate use the depreciation to offset estate income(not just rental income,assuming active participation) prior to distribution. A beneficiary, due to income level, might not be able to use the depreciation to reduce regular income, but just be forced to carry a suspended loss until disposition.

[Stevehofwa]

let’s say due to depreciation, I can show a rental loss.  Can I allocate  income to the estate, which I can then use the loss to offset(let’s say resulting in zero estate taxable income), reducing the taxable income passed on to the beneficiaries?

[Stevehofwa]

So if I allocate all rental income to the estate, then I can use any loss due to depreciation to offset other income, like dividends, etc(I guess up to 25000 if the estate is small)?

[Stevehofwa]

Another question, just to clarify, if the estate fiscal year ends 10/31, then the due date for the return is 2/15 of the next year, or 7/31 with a filed extension.

[Stevehofwa]

Not to be a pest here, I’m amending a return from 2019. Death was 11/08/2018, so fiscal year was 10/31/2018 to 10/31/2019, due date of return 2/15/2020, so amendment can be as a late as 2/15/2023.

[Stevehofwa]

Filed the original return timely.  Noticed I had not included some attorney fees, so thought I would amend to get the deduction.  But now it’s not clear to me how the depreciation worked, exactly.  The estate certainly didn’t owe taxes as the income was passed on to the beneficiaries. Unfortunately used hrblock business, which is a piece of junk.  

[Stevehofwa]

I guess I’ve got until 2/15(filed an extension so later than that if necessary) to figure it out.  Generate k-1, beneficiary files amendment by 4/15(or later if extended).

[Stevehofwa]

Right, I meant 11/08, so a "short" year.