Discussion:Newbie CPA stuck doing a 1041, Need help as to where to put home sale and K1
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> Newbie CPA stuck doing a 1041, Need help as to where to put home sale and K1
| 13 March 2007 | |
| I have a 1041 due shortly, and I put in all the expenses related to the estate, but am not sure where to put the sale of the home. The proceeds went 100% to the sole recipient of the K1, and the estate already paid estate taxes to NJ of 80K+
Can a deduction be taken for this on the Federal 1041? and how do I enter the home sale so it flows to the K1. I imagine there would be no gain, as the estate gets the step up, but can I deduct the expenses associated with the sale. 2% floor or not? Where do I eventually put the net proceeds that were distributed to the executor? Any help is greatly appreciated. Thank you. | |
| 13 March 2007 | |
| Uggh! I only do 1 1041 a year, so I'm not much help. But I would report it on Sch D.
I will wait to read what the more experienced almanacers say! | |
| 13 March 2007 | |
| Technically with one beneficiary the sale should be on his return. If the closing statement actually says the sale was by the estate, put it on Schedule D with the basis increased by the closing costs. The loss and any excess expenses will flow to the beneficiary if you check the return final. | |
| 13 March 2007 | |
| Thanks, Dennis. I am doing a 1041 for them as the sale was listed in the estate's name and there were other income and expenses associated with the estate. (not sure of that matters, as I Do 1041's really rarely and not in the last 7 years since I was a trainee awaiting my license in Public Accounting.) The fiduciary, is getting 100% of the proceeds and needs the K1 for her portion (100%). This estate paid $80K to NJ for their Estaee tax return, but filed no 706 since it didn't meet the federal threshold..
Will all the net cash the fiduciary received when they closed out the estate go on the K1? | |
| 13 March 2007 | |
| Income less expense. If expense is more the excess flows as does the capital loss. NJ estate tax is not a deduction. | |
| 13 March 2007 | |
| I put this in Pro Series, but have another question. Real Estate house was sold for $662,000. Closing costs, with commissions, taxes, and provision for repairs, etc were $44,000. So I put the sale price at the $662 and the basis at $706K (long term loss of $43K) since the step up applied?
So far on the K1, I only have the $43K loss. The fiduciary got 100% of the proceeds (over $600K), so where do I show this? I would imagine, (although maybe wrong) that the Distrubution should show up on a K-1 somewhere? | |
| 13 March 2007 | |
| Thanks so much Dennis, so since the step up of the basis occured, she gets the proceeds of $500K+ and the closong costs push the cost higher than the basis, meaning she gets the loss on her K-1.
Sound right? | |
| 13 March 2007 | |
| Where did you get the basis as 706k? Was that what was listed on the NJ estate transfer tax return? | |
| 13 March 2007 | |
| THe house sold for $662K. Realtor Commissions, Transfer taxes, recording fees and Amount given seller for repairs added $42K. Based on what I was told here, the basis would increase by that amot, since the step up allows the adjustment to market value, of $662K,
Correct? | |
