Charitable Contribution on Estate 1041

[BrooklynAcct]

I'm doing an estate income tax form 1041. The decedent has indicated certain beneficiaries that are charitable organizations in his will. For example 4 benes are cha. orgs and received $40,000 each, and one is an individual also receiving $40,000.

The instructions for Schedule A is "Enter amts paid for charitable purpose out of gross income". The income is: $7000 in divs (of which $3000 is qualified) and a capital loss of $3000 = Total income of $4000.

Q1: Does this mean that the charitable deduction is limited to the income? Can the rest be carried over? Q2: What would the gross income be in the above example?

Q3: Would the human beneficiary gain any benefit from the (limited) contribution? What about any (if any) carryover)?

Thank you in advance.

[sjrcpa · Accepted solution]

Specific bequests to charity do not qualify for the charitable contribution deduction.

[gk624]

For more information search the internet. Also, IRS Pub. 526 & instructions for Schedule A

[BrooklynAcct]

Sorry, had to look at the will again. Actually, it's a residuary bequest.

[BrooklynAcct]

Hi, so it's a residuary bequest (not specific) and so my questions are still posed. Thank you.

[sjrcpa]

Income is $7,000 in your facts Capital gain/loss is corpus. Were there any deductions? If 200K was distributed, and 160K of that went to a charity, then 160/200 x 7,000 is amts paid for charitable purpose out of gross income. No carryover.

[BrooklynAcct]

Thank you! Yes there were deductions (legal fees, etc). But the rules state "paid out of gross income" so the estate will have a loss.