Estate - 1041 Final Return

[Yardley CPA]

Long time client passed away. Her sister (who also happens to be the executrix) brought me the information to prepare the Estate Return. I am not very familiar with nor do I prepare many Estate Returns, and I informed her of this. But she asked that I please prepare it for her.

The deceased had a son who received the home he lived in with my deceased client and an automobile. The sister/executrix received the deceased's pension. Both the son and sister received approximately the same value.

The Estate income was limited to about $350 in interest and dividends and $500 from life insurance proceeds in the name of the Estate.

Expenses included: Funeral amounted to $9,278, lawyer fees of $5,000 and accounting fees of $510.

I believe a K-1 is required but wanted to make sure. Would both the son and sister/executrix receive a K-1? Would the income and expenses be included on the K-1, with 50% going to the son and 50%% to the sister? The entire expenses are included on the 1041...which then flow to the K-1's?

Any help would be truly appreciated.

[BobinNJ]

Hi YardleyCPA, this is BobinNJ (actually Freehold, but spend alot of time in Trenton)

Do you have a copy of the will? It should tell you if there is a residual beneficiary, or if both are to be residual beneficiaries. If only one, then only one

k-1 will be necessary and all the income/losses will be on that one k-1. The Will dictates.

I don't think funeral expenses are deductible on the estate return, and they are certainly not deductible on the final return of the decedant, which you did not mention.

I am assuming that this is a PA resident, not NJ? I have never done a PA estate, so any state ramifications, you're on you're own.

[Yardley CPA]

Hi YardleyCPA, this is BobinNJ (actually Freehold, but spend alot of time in Trenton)

Do you have a copy of the will? It should tell you if there is a residual beneficiary, or if both are to be residual beneficiaries. If only one, then only one

k-1 will be necessary and all the income/losses will be on that one k-1. The Will dictates.

I don't think funeral expenses are deductible on the estate return, and they are certainly not deductible on the final return of the decedant, which you did not mention.

I am assuming that this is a PA resident, not NJ? I have never done a PA estate, so any state ramifications, you're on you're own.

Thanks for your thoughts. Appreciate them!