Estate Tax Question Form 1041

[Terry D EA]

Estate received income from a 401K. Apparently no beneficiaries were listed for the 401K. This is IRD and income tax was withheld. I understand completely that the tax withheld cannot pass thru to the bene. But on the line for the fiduciary expenses to administer the estate, I am little fuzzy as to what can make-up the amount. The fiduciary is also a 50% beneficiary and he spent the time and money to travel from NC to GA to go to court to begin probate of the estate. Those expenses are part that make-up the administration expenses. Good so far, he also paid his mother's (decedent) dish network bill and credit card balance. As I see it, these are items that had his mother not died, they would have been expenses she would have incurred and are not deductible any where correct?

The bene (fiduciary) followed the will and gave 1,000 to her church, 1,000.00 ea to both of her sisters. I know what to do with the church donation. Would both sisters be listed as beneficiaries and require a K-1 to be completed for each of them? To the best of my knowledge, and I will ask, this was part of the will. This would not be an expenses for administering the estate in my opinion. How to handle this part?

[Ringers]

I would list the 401K dist as income and subtract as expenses the travel and court costs of the fiduciary.  The balance (if this is the only income and these are the only expenses of the estate) would be distributed to the beneficiaries on a 50% 25% 25% basis, assuming that the other two sisters compose the other 50% of the beneficiary list.  The personal expenses for credit card bills and TV are nondeductible expenses which should be withheld rateably from the PAYMENTS given to the beneficiaries but not the amounts shown on the K-1's.  The distributible net income should equal the income and the withholding will all be an overpayment to be refunded to the estate and then divided up among the beneficiaries.

If there are other income items or other deductions, the DNI may not reduce the income to zero or there may be a loss which will not be distributed to the beneficiaries until the estate is closed.

[Terry D EA]

These were my thought exactly except the 50/25/25 division . Two brothers were the beneficiaries and two sisters were given 1K each. The two sisters to me would have received a gift from the bene.