Which tax return will NOT be affected by the payment made to Keith's estate?

Which tax return will NOT be affected by the payment made to Keith's estate?

• A. estate's US fiduciary income tax (Form 1041)
• B. Michael's US individual income tax (Form 1040)
• C. Keith's final US individual income tax (Form 1040)
• D. US Estate Tax (Form 706)

Answer: (C)

When a payment goes to the decedent’s estate, it becomes part of the estate’s affairs rather than the decedent’s personal income. The estate files a fiduciary income tax return (Form 1041) to report income received by the estate and taxes due, and the estate may also deal with Form 706 for any estate taxes. The decedent’s final personal return (Form 1040) covers only the income the person earned up to the date of death and does not include post-death receipts to the estate. So a payment made to Keith’s estate would not affect Keith’s final Form 1040, though it would affect the estate’s tax filings.

When a payment goes to the decedent’s estate, it becomes part of the estate’s affairs rather than the decedent’s personal income. The estate files a fiduciary income tax return (Form 1041) to report income received by the estate and taxes due, and the estate may also deal with Form 706 for any estate taxes. The decedent’s final personal return (Form 1040) covers only the income the person earned up to the date of death and does not include post-death receipts to the estate. So a payment made to Keith’s estate would not affect Keith’s final Form 1040, though it would affect the estate’s tax filings.