Regarding the taxation of a Round-Up settlement, my mother passed away in 2012, and I placed her name into a class action lawsuit in 2019 due to her death from non-Hodgkins lymphoma. I received an award letter in November last year, and we started forming an estate for my mother to receive the award. I have been appointed as the Personal Representative of my mother’s estate. The attorney mentioned that if the Estate receives income or retains income-producing assets after the date of death, the Estate may be required to file a Form 1041, U.S. Fiduciary Income Tax Return, and the filing of IRS Form 56. The estate's first fiscal year would be from January 27, 2012, through December 31, 2012, and each year thereafter until the estate is closed. The attorney also provided a document to be filed in court of the inventory of my mother's estate, which is zero except for the unknown amount of the Round-Up settlement after any Medicare liens are processed. Do I need to file a Form 1041 for the estate at this time, or should I do it next year for 2022?

May 4th, 2024

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