Income Tax on an Estate(p5)

Your estate may have an income tax filing requirement for each year that it has $600 or more of gross income or a beneficiary who is a nonresident alien. 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 portion 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 income tax filing requirements, see Form 1041 and its instructions, and Publication 559. You (or your estate) may want to speak with a qualified tax professional to receive help with questions about income tax filing requirements of an estate.