|
Posted by JimH on January 28, 2008, 12:49 pm
Please log in for more thread options kupchik@hotmail.com wrote:
>> Hi, Kupchik.
>>
>> You mean 1041 Estate Income Taxes.
>>
>> A very subtle - but important - point: Estate tax generally is used when
>> talking about the tax on the value of the estate at the time of death. What
>> you are asking about is the income tax on the estate's income after the date
>> of death. Your question is clearly about the tax on the estate's income,
>> not on the value of the estate. When you say "estate tax" without including
>> the word "income", a tax professional will automatically think you mean the
>> date-of-death tax. And adding "1041" sounds ambiguous and leaves us
>> wondering.
>>
>> For several years, I taught short courses and seminars for other CPAs for
>> the California and Oklahoma CPA Societies. One topic was the Federal Estate
>> Tax, for which Form 706 is filed. The other was Federal Income Taxes of
>> Estates and Trusts, reported on Form 1041. Each of the taxes provides
>> plenty of grounds for questions, obviously related, but quite different.
>> Also, while they are covered by the same form and many of the same rules,
>> the income taxation of estates and of trusts have many significant
>> differences. Trustees and executors (by whatever title) are both
>> "fiduciaries", who are bound by law to put the interests of the trust or
>> estate above their own, so the Form 1041 is called the Fiduciary Income Tax
>> Return.
>>
>> Just like individual income tax returns, estate income tax returns can range
>> from the very simple to extremely complex. And some very complicated
>> questions are buried just beneath the surface of what appear to be very
>> simple situations. When I retired in the early 1990s, TurboTax and several
>> other products were available for both "do-it-yourself" and professional
>> individual income tax return preparation. There were no good consumer
>> products for preparation of either Form 706 or Form 1041. There were
>> professional-level products for both kinds of tax planning and return
>> preparation, but they were quite complex and very expensive. I don't know
>> anything about current products, but I would expect the situation to be much
>> the same: consumer products for the very simplest returns, and professional
>> products for all but the simplest situations. And, without professional
>> advice, many (most?) executors and trustees will not recognize when their
>> situations have become too complex for the simple products.
>>
>> Athttp://turbotax.intuit.com/support/kb/update/form-availability/2231.html
>> there is a list of "2007 Federal Forms for Business Returns", including Form
>> 1041. This seems to me a strange place to list 1041, but I suppose it is
>> here because most consumers are never concerned with this form so Intuit
>> keeps it separate from the 1040 listings. I don't see a price here, but the
>> listing for 2006 lists it at $99.95. A Google search for "1041 returns"
>> gets about 594,000 hits; adding "turbotax" narrows it down to 2300.
>>
>> Serving as an executor is an awesome responsibility. I hope you have some
>> competent advisors to help you through this job.
>>
>> Remember, I've been retired for more than a decade. Always check with your
>> own CPA for the current rules.
>>
>> RC
>> --
>> R. C. White, CPA
>> San Marcos, TX
>> (Retired. No longer licensed to practice public accounting.)
>> r...@grandecom.net
>> Microsoft Windows MVP
>> (Currently running Quicken 2008 Deluxe in Vista Ultimate x64)
>>
>>
>>
>>
>>
>>> Are there any Turbo Tax or Tax Cut products that will handle a 1041
>>> for Estate Taxes? If have a very simple one to file with a small
>>> amount of dividends and tax-free interest and a few expenses. Will
>>> they create K-1s?- Hide quoted text -
>> - Show quoted text -
>
> R.C. & Fred, thanks for the info.
>
> J.C., you are correct I was referring to the 1041 Estate Income Tax.
> I spent many hours reviewing the instructions and I seems that in my
> situation, it might be do-able by hand. The estate income was only
> about $6k of dividends and a small amount of tax free interest. It
> looks like I just fill out the 1041showing all income distributed to
> the beneficiares (taking this as a deduction off the 1041 income) and
> issue each their part of the income on a K-1. There would not be any
> tax owed on the 1041 K-1 and each beneficary would pay their portion
> on their 1040.
>
> Any comments would be greatly appreciated!
I'm not an expert on taxes, so I won't give any advice. Last year, when
I had to submit 1041's, I found a PDF file on the IRS web page. you can
fill it in on your computer, then print it. It isn't as nice as using
TurboTax, but for a simple form it was pretty easy.
---
Jim
| 
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap