Detailed Answer — Federal Filing Requirements for an Estate with No Distributions (Indiana)

Short answer: Even if an estate makes no distributions, the estate may still need to file federal tax returns. There are two separate federal filing obligations to consider: (1) the federal estate (death) tax return (Form 706) and (2) the estate’s income tax return (Form 1041). Which, if any, you must file depends on the size of the decedent’s gross estate and whether the estate earned income or has nonresident beneficiaries.

1) Two different returns — know the difference

Federal estate tax (Form 706): This return reports the decedent’s gross estate and calculates any federal estate tax due. It is triggered by the total value of the decedent’s gross estate (assets owned at death plus certain lifetime gifts and other items) relative to the federal filing threshold for the year of death. If the gross estate (plus certain adjustments) is below the applicable exclusion amount for the year of death, you generally do not have to file Form 706. For details and current filing rules, see the IRS Form 706 information: https://www.irs.gov/forms-pubs/about-form-706

Estate income tax (Form 1041): This is the fiduciary income tax return for the estate while it exists as a taxpayer. The estate must file Form 1041 if during the tax year the estate has gross income of $600 or more, or if any beneficiary is a nonresident alien. The obligation to file does not depend on whether you distributed assets to beneficiaries. See IRS Form 1041 information: https://www.irs.gov/forms-pubs/about-form-1041

2) Common scenarios (hypotheticals to illustrate)

Hypothetical A — Small estate, no income, no distributions:

• If the estate’s assets (bank balances, brokerage, real property, life insurance, retirement benefits subject to estate inclusion, etc.) are below the federal estate-tax filing threshold for the decedent’s year of death and the estate earned less than $600 in gross income for the estate tax year, you generally do not need to file either Form 706 or Form 1041.

Hypothetical B — No distributions, but the estate earned interest or dividends:

• If the estate received $600 or more in gross income (for example, bank interest, dividends, rent collected) you must file Form 1041 even if you never distributed funds to beneficiaries.

Hypothetical C — Estate assets large but no distributions:

• If the decedent’s gross estate exceeds the federal estate-tax filing threshold for the year of death, you must file Form 706 regardless of whether distributions occurred.

3) Deadlines and extensions (federal)

• Form 1041: Normally due on the 15th day of the fourth month after the close of the estate’s tax year (for calendar-year estates that is April 15). You can request an extension by filing IRS Form 7004. See: https://www.irs.gov/forms-pubs/about-form-7004 and https://www.irs.gov/forms-pubs/about-form-1041
• Form 706: Generally due nine months after the date of the decedent’s death. You can request an extension using IRS Form 4768. See: https://www.irs.gov/forms-pubs/about-form-706 and https://www.irs.gov/forms-pubs/about-form-4768

4) Indiana state considerations

Indiana does not currently impose a separate state-level estate tax or inheritance tax that survivors must file in addition to federal filings. (Always confirm current state rules through the Indiana Department of Revenue or a local tax professional.) For general state guidance, see the Indiana Department of Revenue: https://www.in.gov/dor/

5) Practical steps to determine whether to file

1. Inventory assets at the date of death (bank and brokerage accounts, retirement accounts, real estate, life insurance payable to the estate, business interests).
2. Determine whether any estate accounts or assets produced income after death (interest, dividends, rent, sale proceeds with gain).
3. Compute the decedent’s gross estate for estate-tax purposes (include assets owned at death and certain lifetime gifts as required when assessing Form 706 filing need).
4. Check whether any beneficiaries are nonresident aliens — if so, that can create a filing requirement for Form 1041 even with minimal income.
5. If your calculations are near the filing thresholds or you are unsure how to value assets (retirement plan benefits, life insurance, business valuations), consult a qualified tax attorney or CPA experienced with estates.

Helpful Hints

• Don’t assume “no distributions” means “no filing.” Filing rules depend on asset values and income, not only distributions.
• Preserve bank statements, brokerage statements, rental records, and closing statements — these show income and asset values needed to determine filing obligations.
• File the decedent’s final Form 1040 for the year of death if required. This is separate from estate returns and often must be completed before settling the estate’s affairs.
• If you expect to owe federal estate tax, consider gathering valuations (appraisals) promptly — they are needed for Form 706 and for any estate-tax elections.
• Use IRS guidance pages when in doubt: Form 1041 (https://www.irs.gov/forms-pubs/about-form-1041) and Form 706 (https://www.irs.gov/forms-pubs/about-form-706).
• If a filing is required but you cannot meet the deadline, file the appropriate IRS extension form (Form 7004 for Form 1041; Form 4768 for Form 706) to avoid late-filing penalties, while noting that extension to file does not extend time to pay taxes owed.
• When in doubt, consult a tax attorney or CPA. Estates often involve valuation and tax issues that are fact-sensitive.

Next steps for readers: Gather a list of estate assets and any post-death income, then review the federal thresholds and IRS instructions linked above. If the estate’s gross income approaches $600, or the gross estate might exceed the federal exclusion for the year of death, contact a tax professional who handles estates.

Disclaimer: This article is educational only and does not provide legal or tax advice. It is not a substitute for advice from a licensed attorney, CPA, or authorized tax professional. Laws and filing thresholds change; consult a qualified professional for guidance tailored to your situation.