Estate Income Tax question (1041)

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trueblueky
Posts: 1311
Joined: Tue May 27, 2014 3:50 pm

Estate Income Tax question (1041)

Post by trueblueky » Tue Jun 12, 2018 3:32 pm

This question concerns the income tax for an estate, not estate tax.

I am working on the Form 1041 for a deceased relative, whose will said the estate would pay state inheritance tax. Vice the heirs paying it individually. That has been done. 1041 instructions say not to include inheritance tax on the line for taxes. Should they go in misc deductions? If so, are they subject to 2% rule?

Hollis4124
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Joined: Tue Jun 12, 2018 3:46 pm

Re: Estate Income Tax question (1041)

Post by Hollis4124 » Tue Jun 12, 2018 4:29 pm

Pretty sure the tax isn't deductible by the estate unless the property was distributed to a charity.

Gill
Posts: 4450
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Estate Income Tax question (1041)

Post by Gill » Tue Jun 12, 2018 5:52 pm

It is not a deduction of any type although I’m wondering, but not sure, if it could be treated as a distribution to the beneficiary to the extent it was their legal obligation to pay the tax. Probably the best approach is to ignore the payment entirely.
Gill

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