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    Final 1040?

    Clients mother passed. DOD was 1/10/18. Income may not be sufficient to require filing. Clients sibling is personal representative per pour-over will (Revocable living trust). I have been asked to file 2017. Have filed and had pers. rep\sister make estimated payment with 4868.

    Can 2017 be "final return"? If not, then does anyone have an estimate of when the final draft of 2018 would be expected.
    Treasur2

    #2
    Sounds likely that 2017 will be her final return, but you don't know unless you have monthly investment statements,** and info regarding pension, IRA withdrawals, etc that occurred between 1/1/18 and 1/10/18. You do not designate 2017 as "final." There is a place in software to show date of death, and it will print across top of Form 1040. If TP did not have income requiring her to file for 2018, and no taxes were withheld, then no return is necessary for 2018. The form will not be available until next January and probably can't be filed until around Feb 1, 2019. (**You can have brokerages and banks furnish information for January 2018 to determine if there was any taxable income. Personal repr probably already has them. )
    Last edited by Burke; 04-24-2018, 09:06 AM.

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      #3
      Originally posted by Treasur2 View Post
      Clients mother passed. DOD was 1/10/18. Income may not be sufficient to require filing. Clients sibling is personal representative per pour-over will (Revocable living trust). I have been asked to file 2017. Have filed and had pers. rep\sister make estimated payment with 4868.

      Can 2017 be "final return"? If not, then does anyone have an estimate of when the final draft of 2018 would be expected.
      No, 2017 cannot be the "final return" in one sense, although if the 2018 short tax year of the decedent does not meet the filing requirement thresholds, it may be the "final return" in practice. However, I would recommend filing the final year 2018 return anyway, even if not required, just to avoid future inquiries.

      Per Pub 559, "Return for preceding year. If an individual died after the close of the tax year, but before the return for that year was filed, the return for the year just closed will not be the final return. The return for that year will be a regular return and the personal representative must file it." There is also an example given.

      As to your final question, what difference does it make when a "final draft" (whatever that is) of TY2018 return is available? It's pretty much guaranteed that IRS won't be accepting 2018 Form 1040 until January 2019 at the earliest, and I'm pretty sure there is no such thing as a "short year" Form 1040 in terms of filing deadlines.

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        #4
        Ok, you've answered my first question. Which is what tells IRS "this is final return". That is indicating TP is deceased. However, if 2018 subsequently needs to be filed. Then 2017 is not final.

        So when does IRS close tp file\account?

        Sorry, guess I should look up on IRS.gov.
        Treasur2

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          #5
          Originally posted by Treasur2 View Post
          So when does IRS close tp file\account?
          What do you mean by "close TP file/account"? If the TP died in 2018, then there will be no more individual returns to file for that taxpayer after tax year 2018. I don't think the IRS is going to delete its data, however.

          There is normally a three year statute of limitations after an original return is filed, so I suppose you could say that assuming a timely TY2018 return is filed, then the account is "closed" as of April 2022, but what does it matter to you or the personal representative?

          Maybe you are thinking of these? See Pub 559, which was already referenced for you, for "Request for prompt assessment (charge) of tax." and "Request for discharge from personal liability for tax."
          Last edited by Rapid Robert; 04-23-2018, 04:31 PM.

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            #6
            I don't believe the IRS will "close" any account until the SOL runs out on each year.
            Believe nothing you have not personally researched and verified.

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              #7
              Originally posted by Treasur2 View Post
              So when does IRS close tp file\account?.
              IRS matches its records of taxpayers' DOBs and DODs with SSA, who is notified of the date of death pretty timely. If anyone tries to file a return for a tax year AFTER the year in which the TP died, it will be rejected. So while a 2018 return MAY be required due to receipt of taxable income or withheld income taxes prior to 1/10/18, that would be the final return as far as their records are concerned.

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