This year I administered the small estate of a sibling that died last December. I had to set up an estate (checking) bank account and got a federal i.d. number. I’ve made all external distributions and there is a small 4-figure amount of my share left in the account. The total did not exceed $30k and had less than $200 income during the year. A no payment required return was filed in April for 2008 income.
Will I need to file a 2009 return for the estate?
What was the purpose of having to get the fed i.d. #?
If I have to file a return for it, should I draw out the rest of my share and close the accout this year so as not to have to file one for next year?
Typically, a estate tax return is required only when there is $600 or more of income for the year or if any beneficiaries are not citizens/residents of the US. Sometimes, a return is requested by the lawyer for the probate process even if not strictly necessary for tax purposes.
I’m taking you at your word about $200 in income. It’s not always clear-cut what is income and what isn’t. For example, the sale of stock or other assets may generate a capital gain if the assets increased in value between date of death and date of sale.
You want to close the estate as soon as you feasibly can. Make sure you’ve paid the necessary expenses and bills and make sure you’re complying with any probate process. Once you’ve got everything taken care of, take the money out for your distributions.
The Federal ID# is necessary if you need to file a tax return, but is also necessary to have bank accounts in the estate’s name. For a very simple estate, it might get used mostly as a way for the IRS, banks and courts to track the estate’s identity, since the EIN is unique like an SSN.
Thanks, Dracoi. There was some stock - 2 shares of General Motors worth $1 each prior to the bankruptcy! Also a 14-year old Dodge van (right when his and my area’s Dodge dealers went kaput). Spent 80% of the under $20k bank cash flying 900 miles r/t a few times, rent on his 33-year-occupied apartment for several months, cleanout of same, probate atty, some decedent expenses, etc. Only post-death income was from royalties from a few freelance cartoons that were published.