What was the date of death? Were the disributions made before or after that date? Do the 1099R's have the decedent SSN or the estate EIN? Were the beneficiaries named in a will or a trust? Is there a probate? Did the testamentary document (will or trust) give designated properties to designated beneficiaries, or were they just divided up according to some percentage formula? What happened to the decedent's cash?
The date of death was May 2022. The distributions were made after death and the 1099’s are issued in the estates EIN. The beneficiaries were named in the Will with the properties designated per beneficiary. I’m not sure about probate, but I don’t think so. The decedents cash was transferred to the estate on death.
If you don't do much estate work, this is not one to learn on. If there is a will and some of the estate has already been administered, there is a probate. Who is your client, anyway? The executor/personal representative? Does that person have a lawyer? Does the lawyer have someone for referrals to do estate tax work? I hope so.
"None of the 1099-R income was distributed until the following year."
When was it distributed? Consider using a fiscal year end on April 30, 2023.
Bob raises good points, too.
Doesn't really matter when it was distributed (or does it, if trying to match expenses with income?) but there's about a week left to file the first return, or at least an extension. Which is why finding an expert is critical.
If it was distributed by April 30, and you use that year end, the estate can get an income distribution deduction. Tax will be paid by the beneficiaries on their 2023 returns at presumably lower rates.
Thank you, Bob, for your input. We have contacted an expert in estate income tax to complete this tax return for the personal representative. I appreciate your feedback!
Thank you sjrcpa for your input. After speaking to an expert, they will be using a fiscal year so as to make use of the income distibution deductions that didn't occur until April of this year. I appreciate you feedback!
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