Is 1041 necessary for estate with only a bank account (interest less than $600)?

[CapedBear]

Hello,

Thank you all in advance for your help! For tax year 2021 regarding a decedent's estate, the IRS states:

The fiduciary (or one of the joint fiduciaries) must file Form 1041 for a domestic estate that has:

1. Gross income for the tax year of $600 or more, or

2. A beneficiary who is a nonresident alien.

3. If you held a qualified investment in a qualified opportunity fund (QOF) at any time during the year, you must file your return with Form 8997 attached. See the Form 8997 instructions.

The estate has only 1 bank account, and although the account's value is more than $600, the interest it gained since my relative's death was far, far less than $600.  The gross income in this case is just the interest gained, not the value of the account, right? Would the fiduciary still be required to file a 1041 or is it okay in this case to not file a 1041 since the interest gained is less than $600? The IRS would not be expecting a 1041, right?

I tried calling the IRS only for them to say they do not answer questions on 1041. Thank you again for your help in these stressful times.

[Anonymous_]

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@CapedBear wrote:

The gross income in this case is just the interest gained, not the value of the account, right? 

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That is correct. In this case, it would be the interest earned on the account and not the value of the account.

[CapedBear]

Thank you, @Anonymous_ ! Does this mean that there is no need to file a 1041? The IRS would not be expecting a 1041 from the fiduciary?

[Anonymous_]

The IRS might be expecting a return if the executor (or other responsible party) applied for an EIN for the estate.

However, that could easily be countered (if necessary) with a response that the estate did not receive $600 or more in gross income.

[CapedBear]

The executor did apply for an EIN... I think it was required by the bank. What would the executor respond to? Would the IRS reach out if a 1041 isn't received? There appeared to be no way to contact the IRS about 1041. The wording in https://www.irs.gov/instructions/i1041 makes it seem that the executor would not have to file a 1041 since the gross income is less than $600, but I really hope I'm not reading this incorrectly.

It appears that the safest way is to file anyway using TurboTax Business, right? Which just adds salt to the wound for a grieving family paying $150+ just to tell the IRS that the estate owes no income tax.

[Anonymous_ · Accepted solution]

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@CapedBear wrote:

Would the IRS reach out if a 1041 isn't received? 

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That is a possibility (most likely remote), but could be quickly resolved with a response to the effect that there was no return requirement due to the income level being below the filing threshold.

[CapedBear]

I see. Thank you so much, @Anonymous_ !