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RPD-41058 Rev. 01/2008 STATE OF NEW MEXICO - TAXATION AND REVENUE DEPARTMENT ESTATE TAX RETURN Mail to Taxation and Revenue Department, P.O. Box 25123, Santa Fe, NM 87504-5123. For assistance call.

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The fiduciary of a domestic decedent's estate, trust, or bankruptcy estate files Form 1041 to report: The income, deductions, gains, losses, etc. of the estate or trust. The income that is either accumulated or held for future distribution or distributed currently to the beneficiaries.

Form 1041 is not needed if there is less than $600 of gross income, there is no taxable income and there aren't any nonresident alien beneficiaries.

Trustees will not normally need to complete a tax return for trust income if it is all mandated directly to the beneficiaries. If the trustees have paid basic rate tax after deduction of trust expenses they will need to complete a Trust and Estate Tax Return (SA900).

A final return for decedent is an income tax return that has been filed for an individual in the year of that taxpayer's death. Taxpayers who die in any given year must have one final tax return submitted to the IRS on their behalf to account for any income or transfers received in that year.

While fiduciary income tax is the income taxation of a person's estate or trust assets, estate tax is a tax on the right to transfer property when a person passes away.

Q: Do trusts have a requirement to file federal income tax returns? A: Trusts must file a Form 1041, U.S. Income Tax Return for Estates and Trusts, for each taxable year where the trust has $600 in income or the trust has a non-resident alien as a beneficiary.

The IRS requires the filing of an income tax return for trusts and estates on Form 1041—formerly known as the fiduciary income tax return. This is because trusts and estates must pay income tax on their income just like you report your own income on a personal tax return each year.

Fiduciary accounting income is defined by the governing instrument and state law and allocates all receipts and disbursements between principal and income. Accountings report items as income or expense when paid or received.

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