Sun City, CA asked in Estate Planning and Tax Law for New York

Q: Does beneficiary pay tax on distributed rental income which the estate previously claimed as income on its tax returns?

Estate earned rental income in 2018, which was claimed as rental income on its 2018 tax returns. Such monies in 2018 were not distributed at that time to beneficiary. In 2019, same money was now distributed to beneficiary. Does beneficiary now need to claim such monies as distributable taxable income on his personal tax return even though the Estate had already paid tax previously on same money?

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2 Lawyer Answers
Nina Whitehurst
Nina Whitehurst
  • Estate Planning Lawyer
  • Crossville, TN

A: That is a very good question, but no, the income does not get taxed twice. It only gets taxed once at the estate level.

D. Mathew Blackburn
D. Mathew Blackburn
  • Tax Law Lawyer
  • Englewood, CO

A: No, once it's taxed on the 1041 it becomes distributed corpus not distributed income.

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