Estate Tax form 1041 question - Please help


S

steve-o

When my sister passed away in August of 2007, I had to open an estate
account to pay off debt and to deposit the proceeds of the sale of her
house. In order to open the account I had to obtain an EIN for the
account.

When I recieved the EIN from the IRS, the letter they sent containing
the EIN number states that I must file form 1041 by 1/15/2009. The
instructions for form 1041 state that you must file the form if the
estate's income was 600.00 or more. The estate account is a non
interest bearing account. The estate has not recieved any income at
all for 2007, or for 2008.

Should I fill out the 1041 anyway with zero's? Should I NOT file it at
all?

The total amount of the estate is around $300,000.00

The house was sold in 2008 and the proceeds deposited into the estate
account. The estate is not yet closed.

Can someone help me out here? - Thanks a lot in advance.
 
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A

Avrum Lapin

steve-o said:
When my sister passed away in August of 2007, I had to open an estate
account to pay off debt and to deposit the proceeds of the sale of her
house. In order to open the account I had to obtain an EIN for the
account.

When I recieved the EIN from the IRS, the letter they sent containing
the EIN number states that I must file form 1041 by 1/15/2009. The
instructions for form 1041 state that you must file the form if the
estate's income was 600.00 or more. The estate account is a non
interest bearing account. The estate has not recieved any income at
all for 2007, or for 2008.

Should I fill out the 1041 anyway with zero's? Should I NOT file it at
all?

The total amount of the estate is around $300,000.00

The house was sold in 2008 and the proceeds deposited into the estate
account. The estate is not yet closed.

Can someone help me out here? - Thanks a lot in advance.
When my first wife passed away I was advised by the estate attorney to
file a 1041 with zeros. It serves as a place holder, and tells nosy
state tax authorities ( California's FTB) that all is kosher.

Unfortunately California gets copies of things like 1099's and looks for
either a California tax return or a federal one with zeros.
 
D

D. Stussy

steve-o said:
When my sister passed away in August of 2007, I had to open an estate
account to pay off debt and to deposit the proceeds of the sale of her
house. In order to open the account I had to obtain an EIN for the
account.

When I recieved the EIN from the IRS, the letter they sent containing
the EIN number states that I must file form 1041 by 1/15/2009. The
instructions for form 1041 state that you must file the form if the
estate's income was 600.00 or more. The estate account is a non
interest bearing account. The estate has not recieved any income at
all for 2007, or for 2008.

Should I fill out the 1041 anyway with zero's? Should I NOT file it at
all?

The total amount of the estate is around $300,000.00

The house was sold in 2008 and the proceeds deposited into the estate
account. The estate is not yet closed.

Can someone help me out here? - Thanks a lot in advance.
Even if it results in no tax, the sale of her residence should
probably be reported, as that is a large amount that the IRS may query
about if no return is [otherwise] filed.
 
S

steve-o

When my sister passed away in August of 2007, I had to open an estate
account to pay off debt and to deposit the proceeds of the sale of her
house. In order to open the account I had to obtain an EIN for the
account.
When I recieved the EIN from the IRS, the letter they sent containing
the EIN number states that I must file form 1041 by 1/15/2009. The
instructions for form 1041 state that you must file the form if the
estate's income was 600.00 or more. The estate account is a non
interest bearing account. The estate has not recieved any income at
all for 2007, or for 2008.
Should I fill out the 1041 anyway with zero's? Should I NOT file it at

The total amount of the estate is around $300,000.00
The house was sold in 2008 and the proceeds deposited into the estate
account. The estate is not yet closed.
Can someone help me out here? - Thanks a lot in advance.
Even if it results in no tax, the sale of her residence should
probably be reported, as that is a large amount that the IRS may query
about if no return is [otherwise] filed.

--
<< ------------------------------------------------------- >>
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- Show quoted text -
Thanks!
Well, Now I'm really confused... My CPA got annoyed at me. He insists
that even though the SS-4 form says I must file the 1041 by Jan. 15,
2009, I don't have to since the IRS doesn't know what my fiscal year
is. Says since the EIN was issued in November of 2007, they assume
1-15-09. Tells me he wants to file a first and final 1041 for 2008 and
list the sale of the property. He insists I don't have to meet the
1-15-09 deadline and I won't recieve any notices. If I do he would
just write the form wasn't sent because there was no income in 2007
(that's a true statement. There was no estate income in 2007, no
1099's or anything). The estate is not closed yet as we are waiting
for the surrogate court to dismiss me. My fathers CPA says we should
send in the 1041 with zero's for the first one but can't have it ready
by 1-15 and it won't matter if its late.
 
E

ed

Even if it results in no tax, the sale of her residence should
probably be reported, as that is a large amount that the IRS may query
about if no return is [otherwise] filed.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used,   >>
<< nor can it used, for the purpose of avoiding penalties  >>
<< that may be imposed upon the taxpayer.                  >>
<<                                                         >>
<<   The Charter and the Guidelines for submitting posts   >>
<<  to this newsgroup as well as our anti-spamming policy  >>
<<                  are atwww.asktax.org.                 >>
<<         Copyright (2007) - All rights reserved.         >>
<< ------------------------------------------------------- >>- Hide quoted text -
- Show quoted text -
Thanks!
Well, Now I'm really confused... My CPA got annoyed at me. He insists
that even though the SS-4 form says I must file the 1041 by Jan. 15,
2009, I don't have to since the IRS doesn't know what my fiscal year
is. Says since the EIN was issued in November of 2007, they assume
1-15-09. Tells me he wants to file a first and final 1041 for 2008 and
list the sale of the property. He insists I don't have to meet the
1-15-09 deadline and I won't recieve any notices. If I do he would
just write the form wasn't sent because there was no income in 2007
(that's a true statement. There was no estate income in 2007, no
1099's or anything). The estate is not closed yet as we are waiting
for the surrogate court to dismiss me. My fathers CPA says we should
send in the 1041 with zero's for the first one but can't have it ready
by 1-15 and it won't matter if its late.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used,   >>
<< nor can it used, for the purpose of avoiding penalties  >>
<< that may be imposed upon the taxpayer.                  >>
<<                                                         >>
<<   The Charter and the Guidelines for submitting posts   >>
<<  to this newsgroup as well as our anti-spamming policy  >>
<<                  are atwww.asktax.org.                 >>
<<         Copyright (2007) - All rights reserved.         >>
<< ------------------------------------------------------- >>- Hide quoted text -

- Show quoted text -
First 1041 return is due Dec 15, 2008 (16 months after date of death),
however, if no txable income, no penalty for late filing..

Why have you got $300K siting fallow for 17 months? He should have
distributed the house proceeds and other investments to you long ago,
or at least put the $300K in some type of investment account, even if
only 2% bank acount to earn $10,000 by now.

ed
 
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S

steve-o

Thanks to all for chiming in. I called my CPA and he explained to me
that he would rather do a first and final in one shot that includes
the sale of the house.
That would do it all with one form and I'm done. For my situation
there is no reason to establish a placeholder or whatever in some
cases he does send in 1041 with zero's.
The form is assuming 1-15-09 based on the date the EIN was issued.
He assured me I won't get notices(yeah famous last words :) ), etc.
and if I do the response would no income for 2007.
Just for the sake of the thread and those that do searches that might
have this same question
about the form and the wording. Let me first remind that the reason
for the post was the wording on the form
"based on this request you must file form 1041 by "1-15-09" even
though form 1041 specifically states to file the form
if income of 600.00 or more. When the property was sold no 1099-S was
issued so I have no knowledge of any 1099's out there
as of now anyway. BTW - There was no gain on the property as the
appraisal, and sale price are equal.

Ed - thanks for the concern but most of the money WAS distributed, so
there's a few bucks in there just in case the surrogate court
has questions and to pay my final Lawyer and accounting fee's(However
I'm going to move the money and close the acct ASAP).

Please note Surrogate courts are slow and so is my Lawyer. Here in
NYS the estate(not estate account) must stay open for 7 months.
My dad doesn't want the money so the lawyer had to file renounciation
of his interest so I would get the dough. Then out of the blue I
recieved
notification of a workers comp case that was out there(we had no idea,
my sister never told us about this), and a settlement was
forthecomming.
So.. We had to get approval of the court for me to accept the
settlement (around 25 grand). That kept it going till I recieved the
check in Nov.
Finally, my lawyer is now going to file to close the estate and
relieve me of my duties as administrator and hopefully that goes fast
and smooth so I can be done with this.
You know losing a sister and having to deal with these things doesn't
make for happy times. My interest is to close the estate, satisfy the
IRS and go
on with my life. My dad and I just want closure. I'm sure anyone that
has had to go through this can relate.

Thanks again for the responses, I learned a lot from you all and I
thank you for that.
 

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