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Level 1

I need to file a 1041 for a client that had to go through probate. He capital gains of $7,000 and attorney fees and fiduciary fees of $12,000. Thus the estate has a net loss. This is a final return. Lacerte wants to distribute the capital gains  and expenses to the beneficiaries. The expenses can't be expensed except through schedule A. Do the capital gains need to be distributed to the beneficiaries?  

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3 Replies 3
Level 15

Yes. Everything gets distributed to the beneficiaries on a final 1041.

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Level 1

Since the estate is a net loss why can't I have the estate pay any income tax which in this case is zero?

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Level 12

Check the "Final Return" box and all the K-1's will show are excess deductions of $5,000.  

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