My mother passed away in 2010 and her trust became an estate. There is nothing to report except the sale of her home in 2011. We signed a 1099s at the closing(trustees myself and my sister). Now do we need to file a form 1041? The adjusted cost basis of the house was less than 200,000. The profit from the home sale was split between my sister and I. There is no other income involved and the house was free and clear.
asked 15 Feb '12, 16:02
How will the IRS know the cost basis, and the resulting gain/loss or break even, if you don't file a return?
The decedent's estate return, on Form 1041, is required to be filed when GROSS income exceeds $600. How does one define gross income in this context other than to use the reported sale price?
Additionally, look to see whose name the 1099s were issued to - if the house was still in your mother's name OR listed as "The Estate Of Mom", why would your sister have to sign? I'm assuming from your post that you signed as trustee. If your sister was a co-trustee THAT would explain her signature. Also, look to see WHAT Federal ID number is on the 1099. If its the decedent's estate ID number, that would give you a clue.
answered 16 Feb '12, 13:33