2021 1041 due date

New client obtained EIN for mom's estate this past February. She used February as fiscal year end. IRS letter confirming EIN says she must file a 1041 by 6/15/21. How is that possible? Shouldn't it be due 6/15/22?Thanks for comments.

Seems "this past February" was February, 2021. With a Feb fiscal year, her first year ended Feb 28, 2021.

The mom died on 2/7/21. Isn't the first fiscal year end 2/28/22?

The first year-end is actually 1.31.22, but your main point is correct. There has been discussion about these letters on here in the past and the general consensus seems to be that the due dates are merely a suggestion.

NO.

The fact the mom died on 2/7/21 means the fiscal year starts then, and ends February 28, 2021. With a fiscal year ending 2/28/21, then the due date, without extension, of first 1041 filing is 3 months and 15 days after, hence the 6/15/21 deadline as communicated by IRS.

I hope whoever handles the estate/trust was prompt in addressing matters after the mom died. It is not much fun dealing with multiyear 1041s, and it is generally because of the Trustee or PR. Sometimes it is due to income streams that refuse to change tax IDs and payees, but fairly rare.

As I understand, the tax year election is made on the initial return. The SS-4 asks what month the tax year will end, and it sounds like in this case they put February, which is kind of silly in this situation (should have chosen January), and if you want to stick with a February year end, then there's a tax return due 6/15/2021 for the tax year Feb. 7-28, 2021. But the year on the SS-4 is not binding. Choose whatever tax year you want on the initial return.

Did not see above response before posting this.

OP said She used February as fiscal year end.. That was the reason for my answer in #2. As stated in this aticle, https://www.journalofaccountancy.com/is ... 25011.html,

Any of the 12 month-end dates that follow the decedent’s death can be the fiscal year-end date, but the year cannot exceed 12 months.

My memory is that the actual selection of the estate's fiscal year is done by filing its first return on that basis, i.e., the EIN application is not the election/adoption. File for any month-end until January, 2022 (due May 15, 2022). Or, if for some reason a Feb year is really important, file for Feb, 2021 by Tuesday coming. You'll be over your big Flag Day celebration by then.

I think you can extend a first taxable year-end before you select that year, then select the year when you file. But check me on that.

Is the trust required to make a Sec 645 election in order to be on fiscal year?

This is an estate. I don't think a trust can have a fiscal year - unless it can elect to be a part of the estate under 645.

This is an estate. I don't think a trust can have a fiscal year - unless it can elect to be a part of the estate under 645.

Yes I am asking about a trust.Thank you.

The decedent passed away on April 23rd 2020. If they want to go with fiscal year, the initial tax year is from 4-23-2020 to 4-22-2021, and therefore the initial return is due on 8-15-2021. So the 645 election has to be made before 8-15-2021, is it correct?

The latest the initial fiscal year could end is March 31, 2021. Return and election were due July 15, 2021.

Thank you. So the Sec 645 election has to be made before 7-15-2021, am I correct?

Or is it the extension due date? Let's say the trust files an extension so it has until 1-15-2020 to file the extended tax return, can the election make after 7-15-2021 but before 1-15-2022?

The EIN letter does not dictate the tax year. Choose with the first return filed.

The EIN letter does not dictate the tax year. Choose with the first return filed.

I understand. Thank you.

My question though is the timing of making the Sec 645 election in order to go with a fiscal year. The initial fiscal year ends on 3-31-2021. The initial tax return is due on 7-15-2021. If the trust files an extension, the initial tax return will be extended to 12-31-2021 (5.5 months extension). So is it correct to assume that the Sec 645 election can be made anytime before 12-31-2021 which is the extension due date?

The 645 election can be made by the extended due date.

The 645 election can be made by the extended due date.

Thank you sjrcpa.

One last question.

The trust needs to file Form 8855 in order to make the 645 election.

The name of Form 8855 is "Election to Treat a Qualified Revocable Trust as Part of an Estate". Is the only tax effect of filing this form making the 645 election to use a fiscal year? Does it have any other possible tax implications?

Cornerstone, what is your reading of Reg 1.441-1(b)(5)(i)(A)?

I'll be interested to read how Cornerstone answers this, and maybe to find out why SumwunLost asked it. Her's the cited reg.

(5) Fiscal year -

(i) Definition. Fiscal year means -

(A) A period of 12 consecutive months ending on the last day of any month other than December; or ...

I'll be interested to read how Cornerstone answers this, and maybe to find out why SumwunLost asked it. Her's the cited reg.

(5) Fiscal year -

(i) Definition. Fiscal year means -

(A) A period of 12 consecutive months ending on the last day of any month other than December; or ...

Had a late night so my brain is not fully functional, hence taking the day off. But I guess I am missing what I am supposed to answer unless it is in reference to when I said the first fiscal year would end vs. original due date of first 1041.

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.

See this from Parker Tax under their explanation of "Tax Year of Estate or Trust," last paragraph (hope I provided proper reference to Parker so I do not get in trouble for sharing among a few people):

An estate can use either a calendar year or a fiscal year as its tax year. The fiduciary of the estate chooses the estate's tax year when it files the first income tax return for the estate. The tax year chosen can end on the last day of any month. Since the estate's first tax year begins on the date of the decedent's death, the first tax year of an estate is usually a short year (Instructions for Form 1041). Generally, once chosen the tax year cannot be changed without IRS approval.