Form 1041 Estates

Question

I'm working on a Form 1041 for an Estate.  The Estate has $350,000 in Cash that came from savings/checking accounts of the decedent.  In addition the estate  earned $32,000 Income in 2023 from Dividends, interest income and other sources so a 1041 is required.

The decedents Will left a cash Bequeath of $75,000 to a Church.  Is the $75 K deductible as a charitable contribution on Form 1041?.  I've received different answers on this question and it's confused me.

Thanks for any assistance.

RMClark55 · Answer

https://community.freetaxusa.com/discussion/comment/1460#Comment_1460

Thank you.  That is what I was hoping was the answer.  The Will authorized the cash bequeath to a Church but didn't specify the source for the payment.  I was wanting to "assume" that $32,000 of the payment was made from "gross income of the estate".  That made sense to me but I couldn't find anything that specifically addressed my questions.

MatthewD · Answer

Hello,

Here is what I found in the Form 1041 Instructions about the Schedule A-Charitable Deduction.  "Generally, any part of the gross income of an estate or trust (other than a simple trust) that, under the terms of the will or governing instrument, is paid (or treated as paid) during the tax year for a charitable purpose specified in section 170(c) is allowed as a deduction to the estate or trust."

There are three requirements that must be met to qualify as a deduction.

* the donation must be from "gross income" of the estate.
* the donation must be authorized by the estate.
* the donation must be to a qualified charitable organization.

Based on what you explained, $32,000 of the earnings would qualify for a charitable deduction.  Here is a link to the instructions for the Charitable Deduction for Estates.

https://www.irs.gov/instructions/i1041#en_US_2023_publink1000286183