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Estate is beneficiary of an IRA

SKC2021
Level 2

A beneficiary of a traditional IRA is the Estate. An IRA was setup as the Estate being the beneficiary. The surviving spouse being the Executrix of the Estate took a total distribution and deposited into an Estate checking account. She was the surviving spouse and once Estate was settled the money in the Estate account became her money. Does an Estate Tax return need to be filed? The IRA was $75,000 If so, can you give instructions?

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BobKamman
Level 15

Page 2, Schedule B, Line 10

Then Line 5, Schedule K-1.

There should be online examples of completed returns -- or maybe basic textbooks.  

She should have been named beneficiary, and since she wasn't, someone should have helped her figure out how to roll it over to her own IRA anyway. 

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BobKamman
Level 15

the estate files a Form 1041, with this and other income and deductions.  If the funds were distributed to the beneficiary in the same tax year, they are deducted by the estate and taxed to her, with the distribution reported on her Schedule K-1.  

SKC2021
Level 2

I am filing a joint tax return since date of death was in 2020. The only thing to be filed on the Estate tax return form 1041 is the IRA distribution to the Estate. How do you show this as a deduction on the 1041. I have never had one of these before. Thanks for your help.

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BobKamman
Level 15

Page 2, Schedule B, Line 10

Then Line 5, Schedule K-1.

There should be online examples of completed returns -- or maybe basic textbooks.  

She should have been named beneficiary, and since she wasn't, someone should have helped her figure out how to roll it over to her own IRA anyway. 

View solution in original post

qbteachmt
Level 15

"someone should have helped her figure out how to roll it over to her own IRA anyway."

Shoulda, woulda, coulda. That ship has sailed.

"took a total distribution and deposited into an Estate checking account."

and now it also goes through Probate, instead of directly to a beneficiary (person) and could have qualified for inherited IRA treatment.

Shoulda, woulda, coulda.

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BobKamman
Level 15

No indication here that there was or needed to be a probate.  For that amount she could have done collection by affidavit, in many states.