RE: Estate 1041 and IRD

[GraceNY]

I am working on an Estate 1041 which is on extension and due by March 15, 2020.

It's a fiscal year 07/01/2018 - 06/30/2019.

Taxpayer was collecting a small pension, $ 425/mo. She died on 07/20/18.  The Company paying the pension was not notified of the pensioner's death until December of 2018.   Another $ 425 was deposited in January of 2019 and then the payments for August, 2018 thru January, 2019 were reclaimed from the decedent's bank account ( $ 2,550)

2018 1099-R issued in the decedent's social security number was $5,100.  There was no 2019 1099-R issued for the $ 425 paid in January of 2019.

I know that the pension payments from January, 2018 thru July, 2018 were reported on  the decedent's final 1040 return ( $ 2,975).  And,  the balance of the 1099-R, $2,125, was reported as a negative on the other income line with the description of XYZ Company Pension IRD to the Estate, EIN XX-XXXXXXX.

Is there any adjustment I can make on the Estate 1041 to take into account the repayment of the $ 2,125 so the estate doesn't get taxed on the income that was reclaimed?

Thank you in advance for any input.

Grace

 

[Catherine]

Report the income on the estate income return, yes.  But then ALSO add in "repayment of over-paid pension" as a correction.  The estate should not be paying tax on income that was repaid.  I could tell you where to enter that in Drake, but someone else will have to provide that detail for ATX. 

If it comes out a wash ($0 total) then lower the repayment by $1 ($1 more income).  In general, as long as there is taxable income generated, the detail information does transmit.  It's when the total comes out to zero that the details get left behind.