Estate Question

[Terry D EA]

My client is the administrator of their mother's estate. Client's residence is in SC. The decedent's residence was in NC. When completing the 1041, (sale of the house only), the program is generating a NC 407 and SC 1041. The sale took place in NC so I get that. Is the SC 1041 required as well? Just want to confirm as I think so due to having to indicate whether it is a resident or non-resident estate for SC.

[DANRVAN]

Depends on state law.

[BrewOne]

in ATX, you have the opportunity to select the State and not have it default to the trustee's address.

[mcbreck]

I've never known an issue where SC would be required. It isn't showing taxable income is it?

As BrewOne said - you have to select the state of residency for the trust as the deceased person's last address.

[Terry D EA]

Found my answer. SC is not required as the estate is a non-resident estate from NC and had no income from any SC sources. I'm using Drake and the instructions for the federal 1041 are pretty clear at using the fiduciaries address. You can tell the program the estate is a non-resident estate but, in this situation, that does not apply. After removing the data from the SC screens, the SC 1041 is gone. 

I am not sure at this time if the estate has been closed to mark the 1041 as final. Personally, I wouldn't see why it wouldn't be as the only asset was the residence and it has been sold. No income from anywhere.

[Gail in Virginia]

Most likely the SC address is causing the computer to think there is a nexus with SC that would result in the estate having a tax liability with that state.