A client died on October 3. What is the income tax year end for his estate?

A client died on October 3. What is the income tax year end for his estate?

• A. October 3 of the following year.
• B. October 31 of the following year.
• C. December 31 of this year.
• D. It depends on the fiscal year chosen for his estate.

Answer: (D)

For an estate, the income tax year end isn’t fixed to a specific date. The executor can elect a fiscal year that ends on the last day of any month, and the initial year can be shortened to 3, 6, 9, or 12 months to fit the situation. That means, after a death in October, the estate’s tax year end could be October 31, or December 31, or another month-end, depending on the election made. Because the year-end is determined by the chosen fiscal year rather than a fixed rule tied to the death date, the correct idea here is that it depends on the fiscal year chosen for the estate.

For an estate, the income tax year end isn’t fixed to a specific date. The executor can elect a fiscal year that ends on the last day of any month, and the initial year can be shortened to 3, 6, 9, or 12 months to fit the situation. That means, after a death in October, the estate’s tax year end could be October 31, or December 31, or another month-end, depending on the election made. Because the year-end is determined by the chosen fiscal year rather than a fixed rule tied to the death date, the correct idea here is that it depends on the fiscal year chosen for the estate.