Discussion:Income on 1041
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Discussion Forum Index --> Advanced Tax Questions --> Income on 1041
Discussion Forum Index --> Tax Questions --> Income on 1041
| 21 March 2009 | |
| I understand that the income of a 1041 filling requirements is 600. But if a car was put into an estate and sold for over 600, does that count? The car was sold for FMV at time of death.
In addition, the estate will be selling a residence in 2009, but incurred a lot of expenses in 2008. Do I include those deductions in 2008 or wait till 2009 to record the selling expenses. | |
| 22 March 2009 | |
| I don't think the sale of the car is reportable, unless there was an actual gain on the sale. Much like the rules in place for those of us who are still breathing. If you sell your personal car for a loss you can't take it, if you sell it for a gain you are supposed to pay tax on it. It's the classic heads I win, tails you lose tax law.
Your estate is on a cash basis so expenses incurred in 2008 do not necessarily help in 2009. Depending on the type of expenses, you could generate a NOL to carry over to 2009. You can also elect a fiscal year for your estate beginning on the date of death and ending the day before on the following year. For example, if the date of death is July 17, 2008, you could elect a fiscal year from July 17, 2008 to July 16, 2009. This may also help you capture some of the expenses incurred during calendar year 2008. PS-The sale of the residence will likely not be a taxable event. The value of the house will be stepped up to FMV, so there's probably not going to be a gain on the sale. You will still have to report it, but there shouldn't be a gain. | |
| 22 March 2009 | |
| Note: A fiscal year may be elected for a period ending no later than the month prior to death.
For a July death, that would be June 30. All other intermediate choices from July 31 to May 31 are available and in many cases can prove beneficial. | |
Walking Spanish (talk|edits) said: | 22 March 2009 |
| Estates may indeed elect a fiscal year, but the year must end on the last day of a month. In the above example, the longest fiscal year possible would end on June 30. | |
| 28 March 2009 | |
| Is there even a need to file if the only income was interest at 70 dollars then? If the expenses in 2008 will not help 2009. What would be the benefit? | |
