2021 1041 due date

I say the fiscal year ends on the last day of the month preceding the anniversary of the death (post #4). Cornerstone says it ends on the last day of the month in which the anniversary falls (post #5). Who is right?

Cornerstone, there has not been an election of a fiscal year yet. Indicating a fiscal year on the SS-4 is not an election. As previously mentioned, the fiscal year is elected on the first return.

Here is the longest fiscal year beginning at DOD: 2/7/21 to 1/31/22

Maybe there was no income from 2/7/21 to 2/28/21, then the fiscal year can begin 3/1/21 and stretch to 2/28/22. Or maybe there there was no income from 2/7/21 to 3/31/21, then the fiscal year can begin 4/1/21 and stretch to 3/31/28. See the pattern here.



[quote="CornerstoneCPA"]
Perhaps some facts are missing but the mother died early February and the estate EIN obtained with a fiscal year election ending February (though I do not get this, since the tax year is chosen upon filing first 1041). For sake of discussion, I am just going to assume the fiscal year is correctly elected. You cannot have a gap between death and when the tax year of the first 1041 kicks in, which is why I said I agreed with the IRS saying the first 1041 was due June 15, 2021, which is 3 months and 15 days after fiscal year end. The day of death is when 1041 filing kicks in, assuming there is income to report.

Lets swap "election" for "intent" of fiduciary since we know fiscal year is actually elected on first 1041. Then yes, a proper fiscal year would be 2/7/2021 through 1/31/2022 and technically short year, still, since the tax period cannot exceed 12 months and needs to end on the last day of a month. 2/7/2021 to 2/28/2022 obviously exceeds 12 months, so a short year return is required if FEBRUARY were to be the end of fiscal year.

The end date of a 1040 in year of death is the date of death. But that is also technically the start of an estate. While this is generally inconsequential, it is why you often see the estate beginning the day after date of death. If fiscal year, then fiscal year end would be the last day of the month prior to anniversary of death.

In the event a fiduciary screws up and actually elects a fiscal year end of February with a February date of death, and income exists between date of death and end of fiscal year, then yes, I believe there would be a short year 1041 covering Feb 7 (or 8) to Feb 28, 2021, and another covering either the full 12 months of March 1, 2021 to February 28, 2022, or a short year ending on date the estate is closed out after March 1, 2021.

Why did I bother commenting about treatment in event of potential fiduciary error(s)? Because in the work I have done on them, the fiduciaries have almost always made some sort of error or even filed an initial 1041 on their own before consulting with a lawyer, CPA, etc.

From #4 by SumwunLost: The first year-end is actually 1.31.22, but your main point is correct.. That correctly describes the latest possible date for the first fiscal year.

From #5 by CornerstoneCPA: The fact the mom died on 2/7/21 means the fiscal year starts then, and ends February 28, 2021.. That correctly describes the earliest possible date for the first fiscal year.

Then in #18 Sumwun asks Corner Cornerstone, what is your reading of Reg 1.441-1(b)(5)(i)(A)?, which I excerpted in relevant part in #19 above. It seems very clear to me and its only possible connection to this thread is to point out that a fiscal year can't be longer than 12 months, which I suppose OP might imply.

What happened to OP, anyway?

I think CornestoneCPA is talking about a partcular situation which can explain the 2/28/2021 fiscal year ending date, but everyone else is talking about the general rule. It seems to me everyone of you is correct in what you say.

I am a fan of Checkpoint.

The following is from Checkpoint

"IRS Consent Required to Change a Tax Year
Once a particular tax year is chosen, it cannot be changed without IRS consent using Form 1128 (Application to Adopt, Change, or Retain a Tax Year) [Regs. 1.441-1(e) and 1.442-1(b)]. The IRS has ruled that the tax year specified on the estate's initial federal income tax return is the tax year adopted by the estate [Reg. 1.441-1(c)(1)].

Example 2B-1: Tax year specified on an extension request in initial year does not determine the tax year.
Tom Roley died May 25, 2020. On April 1, 2021, the estate filed Form 7004 to automatically extend Form 1041 for 5 1/2 months, based on a calendar year. (See Key Issue 1G for coverage of extension requests.) On August 1, the executor determined that an April 30 fiscal year would be more advantageous than a calendar year to the estate and its beneficiaries. Accordingly, the initial Form 1041 was prepared based on the period ending April 30, 2021.

The IRS will not honor the return prepared using the calendar year, as specified on the estate's extension request. The estate established its tax year by filing its initial Form 1041. Therefore, the executor of the Tom Roley Estate must file subsequent Form 1041s using an April 30 fiscal year. Any change to another accounting period requires the approval of the IRS [Reg. 1.441-1(e)]."