Trust and Estate

Who Must File?

The fiduciary of an estate must file a Form 1041. If the estate had more than $600 in taxable income or if there's a beneficiary who is a nonresident alien, according to the Form 1041 instructions on the IRS website. In the case of a trust, the fiduciary must file a Form 1041 if the trust had any taxable income or there's a nonresident alien beneficiary. The fiduciary signs the tax return.

What is Taxed?

According to the IRS website, Form 1041 accounts for "income in respect of a decedent," which is any income paid to the decedent after the date of death. Examples include; deferred salary payable to the estate, uncollected interest on U.S. savings bonds or lump-sum distributions to the beneficiaries of the decedent's individual retirement account. Posthumous income to an estate or trust has the same character it would have had if paid to the decedent while he was alive.