1041 Estate income tax return
Kay Nelson
form for the deceden't home which is in the estate until the
home is sold?
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Lin706
> form for the deceden't home which is in the estate until the
> home is sold?
No.
Michael T Wing CPA
> Are home insurance and home utilities deductible on the 1041
> form for the deceden't home which is in the estate until the
> home is sold?
My understanding is that you can deduct such expenses for a
"reasonable" period of time while the estate is undergoing
administration (probate, etc.). Probably up to 2 years would
not raise a problem; longer than that might require
justification. Also, this assumes that the property has not
been ~permanently~ converted to some other use - like, say,
one of the heirs has occupied it as their "principal
residence".
MTW
frumpy
Richard A Ochs, CPA
David Woods EA MST
>> form for the deceden't home which is in the estate until the
>> home is sold?
> No.
I would disagree with you on that. Unless the a beneficial
owner is using the property, I would consider it investment
property upon the death of the owner and those expenses
would be investment expenses.
David M. Woods, EA, MST, ChFC
(617) 723-2422
Boston, MA
www.rytercpa.com
dwo...@rytercpa.com
This advice does not constitute a client relationship.
If you are not a client, you are on your own.
Drew Edmundson
>> Are home insurance and home utilities deductible on the 1041
>> form for the deceden't home which is in the estate until the
>> home is sold?
> My understanding is that you can deduct such expenses for a
> "reasonable" period of time while the estate is undergoing
> administration (probate, etc.). Probably up to 2 years would
> not raise a problem; longer than that might require
> justification. Also, this assumes that the property has not
> been ~permanently~ converted to some other use - like, say,
> one of the heirs has occupied it as their "principal
> residence".
I thought this rule only applied to the Form 706.
Drew Edmundson, CPA (NC)
Lin706
>>> form for the deceden't home which is in the estate until the
>>> home is sold?
There have been various answers to this question and while
I'm not saying mine is right or anyone else is wrong, I will
say that the preparation of a 1041 is a unique experience
and the interpretation of what can be claimed as a deduction
is very individualized. Not much is written in the code to
help either AND these returns are typically, not audited.
So to the person who asked the question and all who prepare
them - use your judgment and be prepared to stand the audit
test (if that ever happens). IMHO, these are personal
expenses and are not a deduction.
Linda, EA in PA
32 years experience Estates & Trusts
Martha Matthews, EA
>>>> 1041 form for the deceden't home which is in the estate
>>>> until the home is sold?
> There have been various answers to this question and while
> I'm not saying mine is right or anyone else is wrong, I
> will say that the preparation of a 1041 is a unique
> experience and the interpretation of what can be claimed as
> a deduction is very individualized. Not much is written in
> the code to help either AND these returns are typically,
> not audited.
>
> So to the person who asked the question and all who prepare
> them - use your judgment and be prepared to stand the audit
> test (if that ever happens). IMHO, these are personal
> expenses and are not a deduction.
In the 6th Circuit we have some precedent that expenses for
the house are deductible if the house must be sold to pay
debts of the estate.
If the estate is holding the real estate past the time
required to pay actual expenses of the decedent and past the
time when liability for claims passes to the beneficiaries
and the house is not sold then I wouldn't take additional
expenses on the 1041.
Martha Matthews, EA
(about half the time in estates and trusts as Linda <G>)
Michael T Wing CPA
> I will
> say that the preparation of a 1041 is a unique experience
> and the interpretation of what can be claimed as a deduction
> is very individualized. Not much is written in the code to
> help either AND these returns are typically, not audited.
Absolutely agreed!! There is scarce guidance in this area,
and actual practice varies greatly. {bate follows} I'll bet
even Ed Zollars and Bruce Steiner don't have conclusive
answers to this question.
MTW
Michael T Wing CPA
> I thought this rule only applied to the Form 706.
I suppose it is likely that these expenses could be deducted
on *either* (but not both) the 706 or 1041. But, I don't see
any bar to deducting them on the 1041 so long as they
represent expenses of administering the estate.
MTW
Bruce Steiner
> Lin706 <lin...@aol.com> wrote:
>> I will
>> say that the preparation of a 1041 is a unique experience
>> and the interpretation of what can be claimed as a deduction
>> is very individualized. Not much is written in the code to
>> help either AND these returns are typically, not audited.
> Absolutely agreed!! There is scarce guidance in this area,
> and actual practice varies greatly. {bate follows} I'll bet
> even Ed Zollars and Bruce Steiner don't have conclusive
> answers to this question.
Linda and Michael are both correct. But often the real
issue is to what e xtent you can get the deductions for
estate tax purposes.
Bruce Steiner