I am filing the taxes for my dad's estate. His will designated 50% of his estate to go to specific charities, and the remainder to go to family. The will also designated that all taxes be paid for from the estate.
There was interest and capital gains received by the estate for 2020. I also paid out the majority of the charitable contributions designated by the will. These contributions offset the interest and capital gains, so the tax due is zero. Do I need to fill out K-1 schedules when there is no income distribution deduction being taken on the 1041?
K-1 are not needed if there were no distributions of income to beneficiaries.
You indicated the remainder of the estate would go to the family, If there were any distributions to individuals you would issue K1s to the individuals.
Distributions of only assets of the estate don't need to be reported on K-1s.
Here is what I'm thinking, please correct me if it sounds wrong.
Nothing will be retained in the estate once all the taxes are settled. It will all be distributed in 2020 and 2021. In 2020 there were distributions to the charities listed in the will, as well as distributions to family. The distributions to charities greatly exceed the amount of income and capital gains earned by the estate before the investments were sold. So can I take those as a charitable deduction, reducing the taxable income to zero? And then consider the distributions to family as coming from the assets?