Claim of right deduction/credit for a beneficiary

Technical topics regarding tax preparation.
#1
Skatter  
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319
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Boston area
My client, a surviving spouse, receives royalties from books that her deceased husband authored. This year (2018) she will return an advance of $10,000 that a publisher paid 10 years ago to her husband's estate. (She and another individual had agreed with the publisher to complete the book the decedent had begun but they never finished the task in the contracted time.) As a beneficiary of her husband's estate, my client did receive the advance; it was reported on a 1099-MISC to the estate with the estate's TIN and passed out via a K-1 (1041) solely to my client along with other royalties and investment income. Two questions:

--Is the sec. 1341 tax reduction available to a beneficiary who must repay income reported in a prior year by an estate?
--If so, do I use the full $10,000 in the calculation of the deduction or credit or an allocated net the beneficiary received after the various deductions allowed to the estate on its 1041?
 

#2
Nilodop  
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Pennsylvania
To the first question, yes, by analogy to Rev Rul 77-322.
To the second question, $10,000, the amount being repaid.
 

#3
Skatter  
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319
Joined:
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Location:
Boston area
Thanks, especially for the cite.
 


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