I have a trust that made the 645 election and its return was
combined with the estate’s for year ending 9/30/2018. The date of death was
10/18/2017 and therefore, the 645 election expired 10/17/2019. NY issued a tax
refund to the estate on 11/1/2019, for the tax year ended 9/30/2018, for monies
originally paid by the trust. The refund is more than $4,000. The estate had no
income in its fiscal year ending 9/30/2019. There is a carryforward capital
loss from the combined estate/trust return from the sale of property that was
held and sold by the trust during the tax year that ended 9/30/2018.
Forgo an estate return for year ending 9/30/2019 and just
file the trust return for year ending 12/31/2019 that will show the NY tax
refund as income and distribute the remaining losses to the beneficiaries from
the trust that were carried forward from the estate/trust combined return?
Or, should I just file an estate return with the NY state
refund as income in the year ended 9/30/2019, since it was claimed prior to the
645 election expiration date, distribute the losses and show the return as
final for the combined estate and trust? The refund was delayed because NY had
to be provided the Form 8855 for the 645 election in order to credit the monies
paid by the trust and then refund them to the estate. This took more than 3 months.
The trust returns were not prepared here and I am unsure
whether a final 1041 was ever filed for the trust. I do have documents that
show final distributions for the trust were made prior to the filing of the
combined estate/trust return.
I really am baffled. Any clarity or advice will be greatly
appreciated and remembered on Thanksgiving!