What is the name of your state (only U.S. law)? Pennsylvania
A 78-year old IRA owner listed his estate as the beneficiary. He died in August 2007 with an IRA valued at $44,000. In March 2008 the bank reissued the IRA CD in the name of the "ESTATE OF XYZ" for $46,000 which included the earnings from date of death to the reissued IRA CD. The only probate asset turns out to be the IRA.
The bank transferred the monies from the IRA to the estate's checking account in May 2008 for $27,000 and then $19,000 later in July 2008 to close out the IRA CD. Estate administrator has paid out $27,000 in expenses by June 2008, then an additional $6,000 by August 2008 from the estate account. $13,000 now remains in 2009.
At this time only the state inheritance tax return has been filed. No year end has been established for the estate.
QUESTIONS:
(1) Is there any need to identify a short and second year FYE to minimize tax consequences?
(2) Are we now subject to any excise tax for non-distribution of the IRA funds in eithier 2007 or 2008?
(3) What if any amount gets included on a Form 1041--estate trust and/or the K-1?
(4) Do the beneficiaries recognize IRD on their 1040's?
(5) Can the estate income pass directly to the estate beneficiaries to avoid having the estate pay any federal estate taxes?
A 78-year old IRA owner listed his estate as the beneficiary. He died in August 2007 with an IRA valued at $44,000. In March 2008 the bank reissued the IRA CD in the name of the "ESTATE OF XYZ" for $46,000 which included the earnings from date of death to the reissued IRA CD. The only probate asset turns out to be the IRA.
The bank transferred the monies from the IRA to the estate's checking account in May 2008 for $27,000 and then $19,000 later in July 2008 to close out the IRA CD. Estate administrator has paid out $27,000 in expenses by June 2008, then an additional $6,000 by August 2008 from the estate account. $13,000 now remains in 2009.
At this time only the state inheritance tax return has been filed. No year end has been established for the estate.
QUESTIONS:
(1) Is there any need to identify a short and second year FYE to minimize tax consequences?
(2) Are we now subject to any excise tax for non-distribution of the IRA funds in eithier 2007 or 2008?
(3) What if any amount gets included on a Form 1041--estate trust and/or the K-1?
(4) Do the beneficiaries recognize IRD on their 1040's?
(5) Can the estate income pass directly to the estate beneficiaries to avoid having the estate pay any federal estate taxes?