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TechAmateur
Level 2

Taxpayer died and left a Trust. What estimates does the Trustee have to file?

A taxpayer died in mid 2019. The taxpayer left a trust, which was operated by the Trustee for the rest of 2019. What tax estimates does the Trustee file? It is the first time that income will be reported with the IRS issued taxpayer number, which will be reported on a 1041 for 2019.  Income in previous years for this trust was 0. The previous income was reported on the original taxpayer's 1040.

When are the estimate(s) due?

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Critter
Level 15
3 Replies
Critter
Level 15
Carl
Level 15

Taxpayer died and left a Trust. What estimates does the Trustee have to file?

If you are the legally appointed/recognized administrator of the trust, then you need to seek professional help immediately, if not sooner.  This is especially true if the state also taxes personal/trust income.  There are many different types of trust, and just as many ways a trust can be set up. So if you don't know what you're doing, please seek professional help.

When things are done wrong on the 1041 trust return, it is the trust administrator and *NOT* the trust that pays the fines, penalties and late fees. You'll find that professional help will be significantly cheaper. It's also highly likely that the trust, and not the administrator can pay for that professional help to, so that it's no money out of the administrator's pocket.

TechAmateur
Level 2

Taxpayer died and left a Trust. What estimates does the Trustee have to file?

Thank you for these replies.
It appears the answer for the 1041 and Trust will be to submit an estimated payment in January, and later seek a refund of any overpayment. I believe I have the documents showing payments during 2019. I also expect to receive 1099 forms from those who paid, both to the trust and to the individual who died. There will be a final 1040 return for the deceased individual, probably sent with an extension on October 15. If there is a problem it is to assume that I have all the documents. I'm unclear about what to do if the 1099s do not sync with the actual date of death. Somehow that will have to be resolved. (We do not pay taxes twice, both on the final 1040 and the beginning 1041.) I may also see a 1099 arrive in February, 2020 that I did not expect. 
The instructions are a mouthful - including the situation that applies where no 1041 for this account was filed in 2018, as there was 0 income for this Trust that year. It says "However, if a return wasn’t filed for 2018 or that return didn’t cover a full 12 months, item (2) above doesn’t apply." I expect that others have experienced situations like this before.

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