Are expenses to maintain real estate in an estate, deductible as taxable income, tax exempt income, or investment? t

[ivydave]

My research online says the expenses to maintain an estate are deductible, including real estate, but does not clarify how to classify other than deductible expenses.  Turbo tax only gives 3 choices Taxable income, Tax-exempt Income, Investment income.

I don't understand where to put it, and your software is  definitely not clear.

[kerriP]

You stated real estate held in an estate? 

 A deceased person's estate is a separate legal entity for federal income tax purposes. If you’re the executor of someone’s estate, you may need to file an income tax return for the estate, as well as a final personal income tax return for the deceased person.

The executor must file a federal income tax return (Form 1041) if the estate has:

• gross income for the tax year of $600 or more, or
• a beneficiary who is a nonresident alien.

What kind of income does an estate have? Common examples are rents from real estate in the estate, salary that wasn’t paid to the deceased person before death, or interest on an estate bank account.

Any expenses for the maintenance of assets held in the estate, are claimed on the estate tax return.  If you do not have to file an estate tax return because of the gross income rule, if there are a lot of expenses it may be beneficial to file a 1041.  Excess expenses will pass to the beneficiaries on form K-1.