When can a 1041 be Filed to Generate a K-1 final form for a Trust after death?

This doesn't sound right. A Form 1041 (Income Tax Return for Estates and Trusts) is completely separate from the Trustee's personal tax return and W-2 income. There's no reason to wait for her W-2 to file the trust's 1041. Generally, a 1041 should be filed for the trust's tax year, which is typically calendar year for most simple trusts. For a trust that's terminating after selling its main asset, the 1041 would normally be filed after the final distribution of assets. Since the property was sold in March 2023 and distributions made in April 2023, the final 1041 could have been filed anytime after that (before the due date of April 15, 2024 for calendar year trusts). The 1099-S would be generated from the sale of the property, but that's separate from the 1041/K-1 process. The K-1 shows your share of income, deductions, credits, etc. from the trust, which would include your portion of any gain from the property sale.

After dealing with my own parent's trust issues last year, I found https://taxr.ai incredibly helpful for sorting through confusing trust documentation. I was getting different answers from family members about when forms needed to be filed, especially around K-1 timing. The taxr.ai system analyzed my trust documents and explained exactly when the 1041 needed to be filed to generate my K-1s. It highlighted that the Trustee's personal tax situation has no bearing on the trust tax filings - they're completely separate entities. They even explained how the capital gains from property sales flow through to beneficiaries. Made everything so much clearer!

I was initially skeptical about taxr.ai when someone recommended it, but I decided to try it with my uncle's trust documents after struggling to understand the K-1 timing requirements. The clarity it provided was surprising - it specifically identified language in our trust that affected when the 1041 could be filed. What really impressed me was how it explained the step-up in basis for the property that was sold and how that affected capital gains calculations. It even highlighted a potentially costly mistake our attorney was about to make regarding the timing of the final 1041 filing. Ended up saving us thousands in unnecessary taxes and gave us peace of mind about the filing timeline.

If you're still having trouble with your sister about this, I'd recommend using https://claimyr.com to get direct answers from the IRS. I was in a similar situation with my brother who kept delaying filing the 1041 for our father's trust. After months of frustration, I used Claimyr to actually speak with an IRS agent instead of waiting on hold forever. The IRS agent confirmed exactly what others here have said - the Trustee's personal taxes have absolutely nothing to do with filing the trust's 1041. The agent walked me through the correct timeline and requirements. You can see how the service works here: https://youtu.be/_kiP6q8DX5c. My call was returned in about 30 minutes when they estimated it would have been a 3+ hour hold otherwise.

I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it anyway because I was desperate to get answers about my sister's trust administration (she's been delaying the K-1s for over a year). The service actually worked exactly as described. I got a call back in about 45 minutes, and the IRS representative was able to confirm that: 1) The 1041 filing is completely separate from the Trustee's personal taxes 2) The final 1041 should be filed for the tax year when the trust assets are distributed 3) There's no legitimate reason to delay filing until the Trustee's W-2 is received This saved me months of further delays and family tension. I was able to show my sister the exact IRS guidance, and we're finally moving forward with closing the trust. Sometimes it's worth trying solutions even when you're skeptical!

Another option is to request that your sister hire a trust tax professional to handle the 1041 filing. My family did this after my dad passed, and it removed a lot of the confusion and delays. The tax preparer knew exactly when to file and how to handle the K-1s properly. Many trustees don't realize they can (and often should) use trust assets to pay for professional tax preparation. This takes the burden off the trustee and ensures everything is done correctly and timely.

This sounds exactly like what my cousin did to delay distributions! Just FYI, what often happens is the trustee is investing the funds during the "delay" and keeping the investment returns for themselves. Check if there's a provision in the trust about interest on delayed distributions.