Which year's 1041 form should I use for a fiscal year ending 8/31/2021?

Forum|Forum|4 years ago
November 24, 2021
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Hello, I am filing form 1041 for an estate and trust (together) (i.e., taking the Sec 645 election per Form 8855). Although there is no actual estate in that all assets are in the trust, no probate, no executor, I am doing this for a few reasons - no need to pay estimates, I can file only one 1041 for a fiscal year and be done, and the exemption is $600 instead of $100.

However, I realized that I don't yet have the 2021 1099-DIV info needed from one of the brokerages as they operate on a calendar year, so I'm going to need to file a Form 7004 extension for the 1041. My fiscal year ended 8/31/2021, and the 1041 is due 12/15/2021. All taxes will flow through to the beneficiaries via the K-1, so no tax will be due at Federal or State (also filing 541 for California).

My primary question is - next year, when I am able to file, do I need to use the 2021 version of the 1041, or can I use the 2020 version, which I have almost completed? That is, do I need to buy TurboTax Business software again for the 2021 version? It's a fiscal year spanning 9/16/2020 through 8/31/2021, but since neither the 2021 software nor 2021 1041 Form are available, I have used 2020. Hopefully, I can still use 2020 next year when I file? Thank you.

TurboTax Business Windows

A

Anonymous_

Employee

You can use the 2020 edition of TurboTax Business to prepare a 1041 where the fiscal year begins in 2020 and ends in 2021.

Note, however, that you have to take into account any tax law changes since the 2020 edition of TurboTax Business is basically not programmed to do so. However, the tax bracket would be most relevant but that should not impact your 1041 since you are passing all of the income through to your beneficiaries.

Also note that the exemption is useless if all of the income (including gain) is passed through to the beneficiaries (i.e., if nothing is reserved to the trust).

Further still, the trust would not have to make estimated tax payments if it had no tax liability for the preceding 12-month period (i.e., if this is the initial and final return for the trust or if the trust had distributed all of its income/gain in previous tax years).

Critter-3

IF you used the 2020 program to file the 2019 - 2020 return then you can put the 2021 form 1041 on extension and WAIT for the 2021 program to be functional next year.

If you use the 2020 program you will have to start a NEW return for the same trust ... you cannot transfer the prior year information.

If you will only file ONE 1041 ( a first and final) then you can put the return on extension and finish the return when you have the information needed.... then the 2020 program is all you will need to use.

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Anonymous_

Employee

The 2021 edition of TurboTax Business was not really designed to prepare a fiscal year 1041 that began in 2020 and ended in 2021.

Even in Forms Mode, a return prepared in such a manner will get flagged (red boxes) on the Information Worksheet and the K-1(s) will show 2022 as the fiscal year end.