Estate tax

[jsandage]

Both parents passed within one year, last one in January 2022. As representative of the estate, I have already sold their home and all assets have been disposed of, with all proceeds from sale divided equally between siblings. Total Assets were less than $400,000.00

Parents had not been required to file income taxes for over 4 years as they had no income other than social security.

I don’t think the estate would need to file a return since there was no capital gain on the sale of the home, is that correct?

Would there be any form to file for the disbursements to the siblings?

I have searched the IRS website but seems there is nothing required since the estate was so small.

[NateTheGrEAt · Accepted solution]

Hi @jsandage - thanks for chatting with us today and sorry to hear of your loss. 

The filing requirement for an estate to file an estate income tax return (Form 1041) is the estate must have gross income in excess of $600. File an Estate Tax Income Tax Return | Internal Revenue Service (irs.gov)

This income could come from sources like bank interest or dividends. It sounds like the house was sold for the stepped-up basis as you stated there was no capital gain. If the estate did not have more than $600 of income from all sources, no tax return needs to be filed for the estate and there is nothing filed with the IRS to report the sale of property or funds being paid out to the heirs.

I hope this information was helpful!

[jsandage]

Thank you!!