Stock Sales after Date of Death

[Yardley CPA]

I have little experience with Estate Tax. I am preparing the final return for a client who passed away in August 2011. Her will left everything to her daughter. Her estate was relatively small (assets amounted to less than $100,000). The paperwork that was given to me to complete the final return includes stock sales that took place in September 2011. The 1099 B Statements contain an Estate EIN. The daughter confirmed that that they did obtain an EIN for the Estate.

It's my understanding that the final return should contain all activity up to the date of death. I believe the 1041 would contain activity after the date of deatn. I've read in other forums that some preparers have included stock sales (reported on 1099B's with an Estate EIN) that took place after the date of death on the final return and were never questioned. Is this practice acceptable in some cases?

[HaroldinGeorgia]

You can add a new form "Elections/Statements" to the return. There is a "statement" form under the 1040 tab where you can enter a written statement.

[HaroldinGeorgia]

Sorry, this was intended as a response to your question about attachments to a return.

[Yardley CPA]

Thanks, Harold. Somehow this post merged with my earlier one concerning attachments. Thank you.

[OldJack]

It's my understanding that the final return should contain all activity up to the date of death. I believe the 1041 would contain activity after the date of deatn. I've read in other forums that some preparers have included stock sales (reported on 1099B's with an Estate EIN) that took place after the date of death on the final return and were never questioned. Is this practice acceptable in some cases?

Remember, a 1041 is nothing more than a 1040 for the deceased. So all "taxable" transactions before death are on 1040 and ALL "taxable" transactions after death are on the 1041 which usually you flow through to the 1040 of beneficiaries by the 1041-k1. You would prepare both tax returns for the year 2011.