On the other hand, I did a 1041 for an estate that was marked "Final" because everything was distributed to the beneficiaries shortly after the end of the year so there would be no income for the following year, and therefore no filing requirement.  The trust owed tax, mostly on capital gains, but the beneficiaries preferred it didn't flow through to their own returns.  I didn't claim a $600 exemption, probably because the software didn't allow it and I didn't stop to think whether it should.  Four months later they get a refund check for $120 -- 20% tax rate times $600 exemption.  This was confusing because there also happened to be $120 withholding claimed on a small annuity distribution.  After reviewing the rules, I figured out that there are some situations where a "Final" return still qualifies for the exemption.