My father died last year. I inherited the house. Lawyers are working on transferring title in my name. There has been no income for this house. I have continued to pay local real estate taxes on the property. Do I file Form1041 anyway? If so, why? I ve earned nothing on the house and it is still in my possession. Thanks
ADDENDUM: Sorry, it appears I dont have to file a form 1041 since income is not over 600.
@bansidhe wrote:ADDENDUM: Sorry, it appears I dont have to file a form 1041 since income is not over 600.
See https://www.irs.gov/instructions/i1041#en_US_2022_publink1000285942
Generally, you only file an estate return if the estate has income. Owning assets is not income, especially if the assets are going to be transferred to the heirs before they are sold.
However, if the estate also has cash assets, you may be entitled to use that cash to pay the household expenses until it is transferred into your name, rather than your own cash. This won't make a difference in the long run if you are the only heir, but it might be beneficial if there are other heirs. For example, if the house, cash, and other property were to be split between you and a sibling, you would want to pay for the attorneys, the probate fees, and the house upkeep from the estate's cash, rather than your personal money, so that both heirs end up paying their fair share of those expenses when the residue is divided.
Sorry about your loss. You have answered your own question but here is some additional information from the IRS.
Form 1041 is an Internal Revenue Service (IRS) income tax return filed by the trustee or representative of a decedent's estate, trust, or the bankruptcy estate. Part of Section 1041 of the Internal Revenue Code (IRC), Form 1041 is used to declare any taxable income that an estate or trust generated after the decedent passed away and before designated assets were transferred to beneficiaries.