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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Re: How to report Estate Income Date: 4/2/2002 3:51 PM
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Hi: My father's estate took six months to settle. During that time
his stocks received dividends, some went up in value, some down, etc.
My question is how to I report this internal buildup for myself and for my brother who got 1/2 of the proceeds? Help!


If a formal Estate was established (did you get an EIN?), then the Estate files a Fiduciary Return (Form 1041). If the income or assets were disbursed to the beneficiaries, that will be reported on Schedule K-1 of Form 1041, a copy of which is given to each beneficiary. Schedule K-1 (and its instructions) tell you how to transfer each of the numbers to your personal tax return. In general, either the estate or the beneficiaries will be taxed on the dividend and interest income, and may take deductions for deductible expenses. Changes in value of stocks and other investments are ignored until they are sold.

Dealing with Estate income tax issues is not for the timid. The rules are different from those of personal income taxes. I strongly suggest consulting a tax professional.

Ira
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