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Posted 1/4/2007 12:35:35 PM
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Decedent had DNI from trust M included in her 2005 1041 K-1 and reported on her 2005 1040, but not paid out (to her grantor trust P) until March, 2006. She died in Feb. 2006 and the amount was included on ther 706.

Where should the estate tax on the receivable be deducted: (a) her 2005 amended 1040, (b) her short 1040 for 2006, or (c) the 2006 1041 for trust P which continued through 2006?? 

Or is there a choice?   

Marvin Freedman

Post #296
Anonymous
Posted 1/4/2007 1:14:17 PM




Hi Marv,

I would put the deduction for the estate taxes on the return where the DNI was reported.

John Woodford
Post #297
Anonymous
Posted 1/5/2007 9:03:06 AM




I don't think this trust distribution is an item of IRD since it is taxed for income tax purposes prior to death. Accordingly, there will be no estate tax deduction for the estate tax on the 2005 trust income receivable at the date of death.
Post #301
Posted 1/5/2007 9:27:09 AM
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Sorry Marv, I misinterpreted your question.  I would presume that the estate tax that you are referring to is due to the inclusion of the receivable in her estate.  If this is the case then there would no estate tax deduction because the receivable when received was not subject to income tax.
Post #302
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