1041 tax year

[DixieEA]

Taxpayer died 05/01/2010. Only asset that was left to the estate was 401-k taxpayer
that taxpayer had left no benef. Executor filed for fed id # and had 401-k distributed to
the estate. Once in the estate the executor distr the 401-k to benefs according to the
will. This occurred on 07-01-2010. The executor later closed the estate at court house
by the end of 2010. My question is , can I file the 1041 as final with the estate yr
ending on 4-30-2011 and thus making the distr taxable to the benfs. on their 2011
individual returns?

[Burke]

No. Both the distribution date in 2010, coupled with the fact that this was the only asset and it was distributed, and the fact that the estate was closed prior to the end of 2010, makes it taxable in 2010.

[Nashville]

Are You Sure?

Do you not have a full year to file the 1041? i.e. fiscal year ended April 30?

[Burke]

The estate would only have a full fiscal tax year if the estate was open for an entire year beginning with the date of death. Otherwise, if it is closed prior to that because all assets have been distributed, then the estate tax year ends when that event happens. The tax return is due 3 1/2 months from that date. See Pub 559, page 15. "It exists until the final distribution of its assets to the heirs and other beneficiaries."

[DixieEA]

Thanks

Burke, thanks I thought that might be the case. The fact that the executor could
choose the yr was confusing me.

Thanks, DixieEA