TAXMAN Posted March 7 Report Share Posted March 7 TP(the estate) does not own the real estate. The heirs have taken possession to try to sell. However the estate has paid out 10k in repairs and utilities to date. In the return for the estate(1041) I cannot see how we can take this as a deduction. The estate went past its year and has not made any distributions thus a 40 k tax liability (200k income) unless we can use this as a deduction? your thoughts Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted March 7 Report Share Posted March 7 20 minutes ago, TAXMAN said: TP(the estate) does not own the real estate. The heirs have taken possession to try to sell. However the estate has paid out 10k in repairs and utilities to date. In the return for the estate(1041) I cannot see how we can take this as a deduction. The estate went past its year and has not made any distributions thus a 40 k tax liability (200k income) unless we can use this as a deduction? your thoughts Did the estate distribute the house to the heirs? "took possession" is theft if it is owned by the estate. Who is named on the title of the real estate? If it is the estate, then the estate is the only one who can sell the property. If the estate distributed the real estate, then the heirs owe the estate for the repairs the estate paid for. I would put a timeline together of the transactions, because this sounds like a cluster in the making. Tom Longview, TX 1 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted March 8 Report Share Posted March 8 14 hours ago, TAXMAN said: However the estate has paid out 10k in repairs and utilities to date. In the return for the estate(1041) I cannot see how we can take this as a deduction. The estate went past its year and has not made any distributions thus a 40 k tax liability (200k income) unless we can use this as a deduction? I don't see how $10,000 is going to go very far in reducing $200,000 of income. Although if $10,000 was paid after the transfer to heirs, then it might be considered a distribution in lieu of cash since it was to their personal benefit. 2 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted March 8 Report Share Posted March 8 21 hours ago, TAXMAN said: The estate went past its year and has not made any distributions thus a 40 k tax liability (200k income) I am curious is to how the estate made $200,000 in the first year given that any sale of assets should have been mostly offset by step up basis. 3 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 8 Report Share Posted March 8 If the estate actually did not own the real estate, then those expenses are just distributions to the beneficiaries. 2 Quote Link to comment Share on other sites More sharing options...
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