File estate return for $2400 LTCG?

[troutnut1]

I am the executor on an estate from a while back that I have left open because of the probability of undiscovered assets. I just received a 1099 from a mutual fund for $2400 in long term capital gains. There is no other income for this estate in 2022. I think the LTCG tax rate is $0 up to $2800. So do I need to file an estate return for this resulting in zero tax liability or can I just ignore it as long as nothing else shows up in the way of income?

If it matters, the state was Utah.

Thanks in advance for any help on this. I am so grateful to have this place to help in situations like this.

 

[audreyh1]

Just curious as to why was this mutual fund asset was not already passed on to heirs as part of the disposition of the estate?

 

[SecondCor521]

I am the executor on an estate from a while back that I have left open because of the probability of undiscovered assets. I just received a 1099 from a mutual fund for $2400 in long term capital gains. There is no other income for this estate in 2022. I think the LTCG tax rate is $0 up to $2800. So do I need to file an estate return for this resulting in zero tax liability or can I just ignore it as long as nothing else shows up in the way of income?

If it matters, the state was Utah.

Thanks in advance for any help on this. I am so grateful to have this place to help in situations like this.

The estate is required to file a 1041 tax return. From the instructions:

"Who Must File
Decedent's Estate
The fiduciary (or one of the joint fiduciaries) must file Form 1041 for a domestic estate that has:
1. Gross income for the tax year of $600 or more
[...]"

-- https://www.irs.gov/pub/irs-pdf/i1041.pdf page 5

You're probably right that the tax liability is zero, but the filing requirement still exists. And as the executor, that requirement falls on you.

Also, the state of Utah might require a similar tax return since the estate is filing a federal 1041. Check the Utah state tax website for more details. (In Idaho it would be a Form 66.)

 

[troutnut1]

Just curious as to why was this mutual fund asset was not already passed on to heirs as part of the disposition of the estate?

I was an undiscovered asset in a fathers name as custodian and the father had predeceased the son.

 

[troutnut1]

The estate is required to file a 1041 tax return. From the instructions:

"Who Must File
Decedent's Estate
The fiduciary (or one of the joint fiduciaries) must file Form 1041 for a domestic estate that has:
1. Gross income for the tax year of $600 or more
[...]"

-- https://www.irs.gov/pub/irs-pdf/i1041.pdf page 5

You're probably right that the tax liability is zero, but the filing requirement still exists. And as the executor, that requirement falls on you.

Also, the state of Utah might require a similar tax return since the estate is filing a federal 1041. Check the Utah state tax website for more details. (In Idaho it would be a Form 66.)

I sure appreciate that! I was hoping that wasn’t the case somehow but at least I know in time to get it taken care of!