- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
When a significant tax refund was received by a decedent, is the refund that needs to be reported on the estate tax return, Form 1041 limited by the tax benefit rule?
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Yes
Ex-AllStar
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
I am not convinced that any of it has to be reported. Refunds of amounts deducted on a 1040 -- usually these are state income tax refunds, but they can be refunds of other taxes, or other expenses like medical -- are not income. They are adjustments to amounts previously deducted. Just because there is a line on the 1040 for reporting them, doesn't make them income. They are an asset of the estate, and maybe the estate is liable to amend the 1040 to reduce the deduction to the amount actually owed.
Does anyone know of an IRS or court ruling that addresses this question?
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Isn't it IRD?
Ex-AllStar
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
@Blake1040AAAAAAA is your sign-in a nod to The Fonz? 🤔
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
@sjrcpa Isn't it IRD?
That's what I'm asking. It's not income in respect of a living person. It's just an adjustment to an item deducted in an earlier year.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
I remembered a similar conversation. I think you can read this even if you are not a member.
Ex-AllStar
