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MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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Facts - Fiscal year for estate is 8/1/2008 through 7/31/2009.

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- Fiscal year for estate is 8/1/2008 through 7/31/2009.
- 1041 filed for that period is the final return.
- Estate incurred taxable transactions (interest, capital G/L) between 8/1/2008 and 12/1/2008.
- Assets/Income distributed to beneficiaries in December 2008. As a result, there is no taxable income for the estate for the final return.

My question:

The K-1 issued to each beneficiary lists the taxable (and non-taxable) amounts incurred by the estate during its fiscal year which ended 7/31/2009.

However, the beneficiaries are on a calendar year tax period.

Do they report the K-1 amounts on their 2009 1040?....or would they have to file an amended 2008 1040?



The K-1 for the estate ends on 7/31/09 thus it is reported as income on the beneficiaries 2009 returns.

Customer: replied 7 years ago.

Steve - thanks for the update.


As I'm thinking about it, would the final 1041 for the estate have ended when everything was distributed? In other words, in this case, on 12/1/08? And, if so, does that mean that K-1's should have been issued in time for the beneficiaries to include on their 2008 returns?


I reckon the IRS does not know exactly when the distribution took place so maybe it's not a big deal? I just want to make sure the beneficiaries are compliant with IRS rules.





It is possible that the estate should have filed a short year return using a 12/31/08 year end. However, at times, estates are left open a short period of time following the "final" distribution in case any additional assets or liabilities come to light. As the return has been filed using the 7/31/09 fiscal year end, I would leave it as such.

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