FORM 1041 estate return

[grandmabee]

I have an estate return with an fiscal year. House sold thru estate and and in first year. I would like to do an fist and final return BUT the general judgment of final distribution from court was not filed until 4 months after year end. which was to pay the attorney and the pers rep fee. no money in estate just house. no proceeds from from house either just paid closing and mortgage off and attorney fees. Heirs received no money

So am I stuck filing 2 returns first just showing house sale and second year showing attorney fees? or Do I even have to file the second year as no income?

I know its close to the 15th and everyone is real busy but if I could get some help would be appreciated.

[baystorm]

If the estate had no income for the second year - then there is no need to file an estate income tax return for the second year. I would mark the 1041 that you file for year 1 as 'final'

The only reason that I see that you may want to file a second 1041 is for the beneficiaries to deduct some of the final expenses/costs of administering the estate - depending on this amount may not be worth the trouble and additional costs in your fees.

good luck

[Catherine]

Just making a guess here -- can you report on an accrual basis and "accrue" or "encumber" the attorney etc. costs that actually get paid after the turn of the fiscal year?