Question

Final 1041 Decedent Estate Return

Forum|Forum|1 year ago
February 14, 2025
1 reply
0 views

My father died in October 2023. I am the executor of his estate. His estate is a single brokerage account with $30,000 in combination of stock and cash. Last year, total dividends and interest was over $880 (over the $600 minimum) so I have to file a 1041 which will be the initial and final return as all stock and cash were distributed to beneficiaries in 2024. The subsequent K-1's will list the interest and dividends for the beneficiaries to pay taxes. The stock value is at a loss compared to cost basis. Does the total amount of estate principal passed to the beneficiaries need to be listed on the 1041? If so, where do you list it? If so, do you list the stock at FMV or at cost basis? Can the stock loss be passed to the beneficiaries? Thanks.

M-MTax

Yes, the loss can be passed through to the beneficiaries (on their K-1s, Line 11 with a D code).

You can input the exact amount of the distribution but will only get an IDD (income distribution deduction) for the amount of net income distributed (you do not have to report distributions of principal (aka corpus), however).