Form 1041 Question

[moviemike3]

Dad died in 2019

we sold his house last year for the value of the house at the time of his death so our gain was zero.

we sold the remainder of his stock and $9k was reported to the IRS

we had funeral expenses of $7,000, legal fees of $6,000 and we paid the real estate broker $13,200

do we even need to file a final estate tax return?

As an aside does anyone know what "Non-Covered Securities Transactions for which basis is not reported to the IRS" means in box 5 of "Form 1099-B  Proceeds From Broker And Barter Exchange Transactions"

I am flying so blind here i am going to fly into a mountainside

[M-MTax · Accepted solution]

Funeral expenses aren't deductible at all. You'll need to file a 1041 if the estate has income of $600 or more and it will probably get a 1099.....or more than one.....anyway. You can probably deduct the legal expenses on the 1041 depending on what they were for and the broker's commissions are deducted as selling expenses. 

Box 5 is this: 

Box 5. If checked, the securities sold were noncovered securities and boxes 1b, 1e, 1f, 1g, and 2 may be blank. Generally, a noncovered security means: stock purchased before 2011, stock in most mutual funds purchased before 2012, stock purchased in or transferred to a dividend reinvestment plan before 2012, debt acquired before 2014, options granted or acquired before 2014, and securities futures contracts entered into before 2014.

[moviemike3]

i'm assuming that even if not reported to the IRS I must report the sale of non-covered securities - wouldn't the cost basis still be the price of the stock on dad's death

[M-MTax · Accepted solution]

That's right