Tax Law (Questions About Taxes)/Estate Tax

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Question
Hello
I am the executrix of an estate which opened in 2011.  In 2012, the home in the estate was sold at a loss of $20k (selling expenses).  There was also one distribution to beneficiaries in 2012.  There was no other activity in the estate (interest income was $9).  The estate will close in 2013.

I filed a 1041, and will amend depending on responses.

My questions are:
1) Do I need to file a k-1 for the beneficiaries with the $3,000 capital loss flowing through to their return?  Then in the final return in 2013, report the loss less $3K?

 OR, do I not file a k-1 with any loss until 2013 (when estate is closed) and put the entire loss on the k-1.

If this is true, does a k-1 need to be filed in 2012?

2) Does the distribtion need to be reported somewhere?

Thanks for your help!

Linda

Answer
Linda,

Thanks for your question.

The loss on the sale of the house is fully reported on line 4 of page 1 of the 1041 in the year of sale.

The full loss is not included on line 1 of the K-1, but on line 4a as a negative amount.  Each beneficiary then applies the loss to his or her return as applicable.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

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DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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