Income Tax on an Estate(p11)

Your estate may have an income tax filing requirement for each year that it has $600 or more of gross income or has a beneficiary who is a nonresident alien, from the date of death until the final distribution of the assets to the beneficiaries. The tax is figured on the estate's income in a manner similar to that for individuals.

Every estate with an income tax filing requirement must file a Form 1041.

Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. reports a beneficiary's distributive share of income, deductions, and credits from the estate. Also, for the final year of the estate, a beneficiary may receive the following tax benefits from the estate:

• Excess deductions on termination, which are treated as itemized deductions;
• Unused capital loss carryovers;
• Unused net operating loss carryovers; and
• Payment of estimated taxes.

If you think your estate may have other tax filing requirements, see Form 1041 and its instructions, and Publication 559.