Fiduciary return

[joejoe1592]

I am kind of mixed up were it comes to this 1041 form. 

I am Administrator/Executor of an intestate small estate.  The estate only consists of about $65k cash that is to be divided among 5 beneficiary's in total.

The estate was created in 2018.  There was a total of $4100 of income (interest+sale of a car) received in 2018. 

TT Business says I owe about $470 taxes. 

Once I pay this, what do I do next in terms of taxes to close this estate out and distribute the value to the beneficiary's? 

Do I file another 1041 form in 2019 and mark that as a final return?  Or do I have to wait until 2021 to do that?  Or what?

Is this the proper place to ask these questions?

[LeonardS]

If all the assets of the estate were distributed in 2019 then you will file a Form 1041 for 2019 and indicate that it is the final tax return.  If you did not distribute all the estates assets in 2019 you will file Form 1041 but do not indicate that it is the final return for the estate.  You will file the estates final tax return for the year in which all the assets remaining were distributed.

[joejoe1592]

I am not posing the question correctly, so let me try once more.

The estate was created in 2019 and the cash assets were retrieved then.  These cash assets gained $3k of interest over the period of time they were held by the state of NJ and that $3k was realized in 2019 along with $1k from the sale of the decedents auto.  

There are 5 equal beneficiaries.  I want to pay the estates assets to them in 2020 and close out the estate.

When I checked final return in TT, it required at least one beneficiary (I put in myself) and then seemed to transfer the $4k to the beneficiary to be responsible for the taxes.

But I don't want to have to wind up dividing the $4k by the 5 beneficiaries and pushing that divided amount out to each of them, making each responsible for paying taxes on $800 of estate income.  I would rather have the estate pay any taxes due first.

I can then add that $4k to the total assets and distribute them equally among the five beneficiaries, close the estate and be done with this awful task forever and ever!

Is there a way to make TT do this for me?

[fanfare]

the estate tax is high so it is usually  preferable to have the beneficiaries pay the tax at their rates.

the downside is they have to figure out how to file a K-1.

As executor, you can choose to do it your proposed way ; don't identify any beneficiaries.

[fanfare]

if Turbotax insists on a beneficiary, it should be "Estate of <deceased>"
That should work.

Disclaimer: I'm no expert on estate tax.

[joejoe1592]

It's only $4k of income.  The TT computer tax is a little over $400, so looks to be about 10%.  Can't complain about that.

[joejoe1592]

"if Turbotax insists on a beneficiary, it should be "Estate of <deceased>"
That should work.

Disclaimer: I'm no expert on estate tax."

I will give that a try later but I would expect then that a K-1 for the estate will be generated.  Will that be kosher?

Disclaimer: I know almost nothing about what I am doing!