How to File Colorado Form DR 0105 Fiduciary Income Tax Return Without a CPA

Colorado Form DR 0105 is the fiduciary income tax return for estates and trusts. It's the return most Colorado executors don't know they're required to file — until the IRS sends a notice or the estate's CPA mentions it as an afterthought. Here's what it is, when it's required, and how to navigate it without automatically paying for professional help.

What Form DR 0105 Actually Is

When a person dies, their estate becomes a separate taxable entity. From the date of death until the estate is formally closed, any income that flows into the estate — bank interest, stock dividends, rental payments, capital gains from selling estate property — is taxed to the estate, not to the beneficiaries and not to the deceased.

Form DR 0105 is Colorado's fiduciary income tax return, filed alongside the federal Form 1041. These are distinct from the deceased's final individual income tax return (Form DR 0104 paired with federal Form 1040). The final individual return covers January 1 through the date of death. The fiduciary return covers the date of death onward, for as long as the estate remains open.

The estate is its own taxpayer. It needs its own EIN. It files its own return.

When DR 0105 Is Required

You must file Form DR 0105 if the estate has:

• Colorado-source income during the administration period. This includes interest earned on estate bank accounts, dividends from brokerage accounts held by the estate, rental income from estate property, and capital gains from selling Colorado real estate or stock during probate.
• Income in Respect of a Decedent (IRD) assigned to the estate. This covers income the deceased earned but hadn't received before death — a final paycheck, accrued vacation payout, deferred compensation, IRA distributions triggered after death, or year-end bonuses paid post-mortem. When the estate (not a named beneficiary) receives IRD, it's reported on the estate's DR 0105, not the deceased's final DR 0104.

If the estate is closed quickly — within weeks of death, before any income accumulates — and the estate accounts generated zero income, no DR 0105 is required. In practice, most probate processes take 9 to 24 months, and almost any estate bank account will accumulate some interest during that period.

What You Need Before You Start

Before filing DR 0105, you need to have completed or assembled:

• Estate EIN — Apply via IRS Form SS-4 (online at IRS.gov, takes 15 minutes). The estate cannot use the deceased's Social Security number. Banks will reject you, and the IRS will reject the return, without this.
• Fiscal year election — Estates can elect a fiscal year ending on the last day of any month within 12 months of the date of death, rather than the calendar year. Choosing a fiscal year that ends just before the one-year anniversary of death can defer Schedule K-1 income to beneficiaries into a subsequent tax year — useful if beneficiaries are in a high-income year. This election is made on the estate's first Form 1041.
• Income documentation — Gather all 1099s issued to the estate's EIN, brokerage statements showing post-death dividends and interest, any W-2 or 1099 issued to the deceased for income that was actually paid after death (this becomes IRD), and records of any Colorado real estate sold during the administration period.
• Deductible expenses — The estate can deduct administration expenses: attorney fees, CPA fees, probate court filing fees ($229 in 2026), publication costs ($120–$250 for creditor notice), appraiser fees, and reasonable executor compensation.

The Filing Sequence

Step 1: File the federal Form 1041 first (or simultaneously). Form DR 0105 flows from the federal return. The estate's federal taxable income or loss flows through to the Colorado return. Many of the calculations on DR 0105 reference federal Form 1041 line items directly.

Step 2: Complete the federal Form 1041 Schedule K-1 for each beneficiary. If the estate passes income through to beneficiaries rather than paying tax at the estate level, the K-1 tells each beneficiary their share of income, deductions, and credits.

Step 3: Complete Form DR 0105. The form asks for Colorado-source income (not all income — only income with a Colorado connection), applicable deductions, and the estate's Colorado tax at the 4.40% flat rate. The estate's federal exemption amount ($600 for a simple estate) applies.

Step 4: Submit to the Colorado Department of Revenue. Unlike probate court documents, the DOR accepts electronic filing. The due date mirrors the federal Form 1041 deadline: the 15th day of the 4th month after the close of the estate's fiscal year. For a calendar-year estate, this is April 15. An extension (Form DR 0158-F) grants six additional months.

Step 5: Issue Colorado K-1 equivalents. If beneficiaries receive Colorado-source income via the estate, they need the Colorado K-1 information for their own state returns.

Estimated Tax Payments (Form DR 0105EP)

If the estate is selling a large asset — a house, a significant stock portfolio — during the administration period, the capital gain will likely generate a substantial tax liability. The estate can make estimated tax payments using Form DR 0105EP to avoid the underpayment penalty. CPAs handling large estate liquidations strongly recommend this. For a small estate earning only bank interest, estimated payments are rarely necessary.

Where This Gets Complex Enough to Warrant Professional Help

File DR 0105 yourself if:

• The estate's income is simple: bank interest, dividends, no capital gains from major asset sales
• You're comfortable with basic tax form instructions and have the federal Form 1041 as your guide
• The estate is straightforward: no business income, no S-corp or partnership K-1s passed through to the estate

Bring in a CPA if:

• The estate received significant capital gains from selling the family home or a large portfolio (step-up in basis documentation must be precise, and the fiscal year election can make a material difference)
• The deceased had an S-corp or partnership interest, generating K-1 income that flows to the estate
• You're unsure whether specific income items are IRD (taxed to the estate) versus properly attributable to named beneficiaries who received the funds directly
• The estate extends across multiple tax years and you want to strategically minimize the combined tax burden on beneficiaries

The Common Mistakes That Trigger Notices

Confusing the final individual return and the fiduciary return. Income earned before death goes on the deceased's DR 0104. Income earned after death by the estate goes on the estate's DR 0105. A 1099 issued after the date of death in the deceased's Social Security number (not the estate's EIN) creates confusion — the income is typically IRD that belongs on the DR 0105, not the DR 0104.

Missing the filing obligation entirely. Executors who close probate without ever filing a DR 0105 — because nobody told them it was required — eventually hear from the Colorado Department of Revenue. The DOR can assess the tax, penalties (5% per month of unpaid tax, up to 25%), and interest.

Using the decedent's SSN instead of the estate's EIN. Any income earned after death must be reported under the estate's EIN. If brokerage firms or banks issued 1099s under the deceased's Social Security number for post-death income, you'll need to work with the institution to correct the records or carefully document the proper treatment on both returns.

Failing to deduct administration expenses. Probate court fees, attorney fees, CPA fees, appraiser fees, and publication costs are all deductible on Form 1041 / DR 0105. Executors who don't know this leave money on the table — and since the estate pays tax at its own rate, these deductions have real dollar value.

Getting the Complete Picture

Form DR 0105 is one piece of a larger filing sequence that also includes the deceased's final DR 0104, the estate EIN, the step-up in basis documentation, the TD-1000 real property transfer declaration, and the senior property tax exemption transfer if there's a surviving spouse. The Colorado Final Tax & Estate Tax Guide covers all of these in sequence — including the specific DR 0105 instructions, the fiscal year election mechanics, and the CPA handoff checklist if you do decide to bring in a professional for the fiduciary return.

Frequently Asked Questions

Is DR 0105 required even if the estate owes no Colorado tax?

If the estate had Colorado-source income, the filing requirement exists regardless of whether tax is owed. A zero-tax estate may still need to file to document its income, deductions, and the distribution to beneficiaries via K-1. Failing to file when required triggers the same penalty structure as filing late with tax owed — the DOR assesses based on the existence of the filing obligation, not just the amount of tax.

Can I file DR 0105 electronically as a self-represented executor?

Yes. The Colorado Department of Revenue accepts DR 0105 through the Revenue Online portal. Unlike probate court filings, which have different electronic access rules for attorneys versus pro se litigants, the DOR's online filing system is equally accessible to all filers.

What's the difference between IRD income reported on DR 0105 versus the deceased's final DR 0104?

Income the deceased earned before death but hadn't yet received — a final paycheck, accrued PTO, deferred compensation — is "Income in Respect of a Decedent." If the estate collects it, it goes on the estate's DR 0105 (and federal Form 1041). If a named beneficiary or the surviving spouse received it directly as a beneficiary designation, it goes on their personal return, not the estate's. The distinction matters because IRD is sometimes double-deductible at the federal level (as an estate tax deduction if estate tax was paid, which applies to very few estates at the $15 million threshold). Misclassifying IRD between the two returns is a common trigger for IRS notices.

Does the estate need to file DR 0105 for every year it remains open?

Yes. If the estate is open across multiple tax years and generates Colorado-source income in each year, a separate DR 0105 is required for each year. This is one reason Colorado probate attorneys and CPAs recommend closing estates promptly — the longer the estate stays open, the more annual filings accumulate.

Can I deduct funeral expenses on Form DR 0105 or the federal Form 1041?

No. Funeral expenses are deductible on the federal estate tax return (Form 706), not on the income tax return. Since the federal estate tax exemption is $15 million in 2026, the vast majority of Colorado estates won't file a Form 706 at all, which means funeral expenses typically aren't deductible anywhere on the tax return. Estate administration expenses — attorney fees, CPA fees, court costs — are deductible on Form 1041 and DR 0105. These are separate from funeral costs.

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