Elect a fiscal year. Generally, estates and trusts are taxed on a calendar year basis, but estates may elect to be taxed on a fiscal year basis. Moreover, an election may be made to treat a decedentís qualified revocable trust as part of the estate, thereby permitting the trust to be taxed on a fiscal year basis as well. A fiscal year is adopted when filing the estateís first federal income tax return, Form 1041. It is not sufficient to indicate the fiscal year when extending the due date for the Form 1041 or when applying for the estateís Employer Identification Number.
All Financial Planning articles are archived after 7 days. REGISTER NOW for unlimited access to all recently archived articles, as well as thousands of searchable stories. Registered Members also gain access to exclusive industry white paper downloads, web seminars, blog discussions, the iPad App, CE Exams, and conference discounts. Qualified members may also choose to receive our free monthly magazine and any of our daily or weekly e-newsletters covering the latest breaking news, opinions from industry leaders, developing trends and growth strategies.