Schedule E when estate K-1 has zero income ?

Question

I had K-1 income in 2006 and 2007, from my mother's estate, and I dutifully entered it into TurboTax. This year, the estate was closed in early-2008 and the executor was careful to keep money in non-interest bearing accounts until then, so that the estate would have no income; she has verified that no 1099's have been received. So there should be no K-1 generated, and I have entered none into TurboTax. Nonetheless, TurboTax seems fairly insistent upon filing a Schedule E with my return, showing the estate, but with no income.

Can I safely delete Schedule E ? Will the IRS somehow want to see the Schedule E to confirm that the estate had no income in 2008 ? Or am I in the clear if no K-1 income is reported to the IRS (by the estate tax accountant, presumably) ?

Thanks.

Paul Thomas, CPA · Accepted Answer

"JGE"  wroteAnd that all would be correct.It wouldn't hurt to go through the steps, report the zero K-1, hopefully marked as final in your software, and that settles it.There shouldn't be any cost to you for including a zero balance Schedule E with your return.

JGE · Answer

Actually, I just noticed that the previous years' returns (when there WAS a K-1 from the estate) also filed a Schedule E, but there was no income on Schedule E - it was just entered on Schedules B and D. So it's like Schedule E is just a place to declare that there IS a K-1 ? Which still leaves the question, do I need the Schedule E this year to show the estate still existed in 2008, but there's no income (since nothing will show up on any of the other Schedules like B and D) ?

dpb · Answer

...Why not--that is, what's the big deal about filing an additional form w/ a return?

JGE · Answer

Nothing I guess, esp. with eFile.   But shall I keep filing ScheduleEforever ?!?  :)

dpb · Answer

...No, once the estate is officially closed, the tax year following and all subsequent there's no entity for which _to_ file and the K-1's will also cease.

Schedule E when estate K-1 has zero income ?

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