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Subject:  Timing Estimated Tax Payments-Form 1041 K-1 Date:  12/10/2012  10:58 AM
Author:  reitsbyziggy Number:  117088 of 127613

My mother passed away in February of 2012. She had a substantial amount of deferred interest from US savings bonds and therefore a decision was made to distribute the Form 1041 income to the heirs thru K-1 Forms. The Estate will have a Fiscal year end of January 31, 2013. I understand that each of the heirs will be required to roll this income into our calendar year 2013 tax return.

My question relates to the timing of required estimated tax deposits to avoid penalties. Is this January 31, 2013 income recognition considered a first quarter 2013 event and the estimated tax associated with it due by April 15, 2013 in order to avoid penalties for monies not deposited within the tax year or can it be just paid by April 15, 2014 when filing the 2013 tax returns?

I realize there are exceptions for estimated tax penalties such as the 90% rule of actual 2013 tax liability or the 100% rule (110% for higher income Taxpayers) of equal quarterly deposits of our actual 2012 liability. Some of the heirs may have declines in income which would cause their normal payroll withholding to fall short to comply with these exceptions.
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