I am completing an estate tax return form 1041. The deceased inherited money that included a net long term capital gain of $10,000. The deceased estate received a K1 form. The gain was passed from the other estate to my persons estate but I can not pass it to my persons heirs for tax purposes - they do get the money. The estate is being taxed on this amount with all other income being passed on to heirs. Can I get around this? I thought all inherited income could pass on to heirs for tax purposes. Unfortunately I do not have the money to pay this in the estate - I will have to pay it myself. I thought all inherited income would be passed on for taxation to the heirs.
If you are using TurboTax Business, there is a procedure you need to follow.
First, you need to allocate the capital gain to the beneficiaries and then to income before you can distribute the gain (see screenshots).
If you are using TurboTax Business, there is a procedure you need to follow.
First, you need to allocate the capital gain to the beneficiaries and then to income before you can distribute the gain (see screenshots).
since it is capital gain, either the trust must permit or require the distribution, or state law must allow a discretionary distribution.
This is an estate, not a trust, so there is likely to be only one return to be filed (the last) and gain can be passed through regardless.