Estate Income Tax - Current income, past deductions Hi folks. While I've done OK for the most part in managing my mother's small estate, I made one mistake. For reasons I won't go into (except to say that there did not seem to be any other real alternative), a small IRA was liquidated, the proceeds deposited into a bank account in the name of the estate. It's a standard IRA, so a combination of pre-tax deposits and interest--so, all taxable. This was done in 2016, and it stayed there through the end of the tax year. I didn't recognize the problem until too late. I filed an extension and now need to settle it.
Because all other potentially taxable assets were promptly passed along to beneficiaries, this is the only income the estate has had or will have.
The estate has incurred deductible expenses--legal fees mostly, but also some maintenance on inherited real estate--but these were mostly in the 2015 tax year. I also paid for the funeral out of estate funds. But because the estate had no taxable income that year, I did not file an estate income tax return.
I'll ask a general question and a specific one:
1. What's the best way to handle this to minimize my tax liability? Is there anything I can do at this point?
2. Is there a way to claim deductible expenses incurred in previous years?
Thanks,
Jim |