Filing, the Estate’s Year and the §645 Election

Who files

• A domestic estate files Form 1041 when its gross income for the year is $600 or more, when any beneficiary is a nonresident alien, or when a §645 election combines it with a trust and the two together exceed $600. A domestic trust files when it has any taxable income, when its gross income is over $600, or when it has an NRA beneficiary (Reg. §1.6012-3). Gross income is computed with no deductions (Reg. §1.641(a)-2).
• Ancillary representatives in another state technically file their own 1041 for the property they administer (Reg. §1.6012-3(a)(3)); in practice the domiciliary executor’s return covers everything and the ancillary files a statement.
• A grantor trust on the grantor-TIN method files nothing. A trust on the standard method files the shell return every year even with no taxable income.
• The fiduciary gives notice on Form 56 at appointment and at discharge (§§6903, 6036), files Form 8822 to move the decedent’s last-known address, and gets the EIN on Form SS-4 — the fiscal year entered there does not bind.

The estate’s tax year

• A decedent’s estate begins at the moment of death. Its first tax year may end on the last day of any month within twelve months of death, and the year is chosen simply by filing the first return, or the first extension, on that basis. Course Study Question 4: a death in November 2019 allows any year-end from November 30, 2019 through October 31, 2020.
• What it buys: the first return and the first K-1s move out as much as a year; income is deferred into the beneficiaries’ following calendar year (§662(c)); the estate can pick a year that lands the big income (the IRA, the house sale) in a short year with its own brackets.
• What it costs: the executor thinks in a fiscal year; the termination year can bunch two years of income into one beneficiary year — on termination of a fiscal-year estate, a beneficiary reports both the regular fiscal year and the final short year if both end in the same calendar year.
• Trusts must use the calendar year (§644) except §501(a) and §4947(a)(1) trusts, trusts that are wholly grantor trusts, and a qualified revocable trust under a §645 election for the election period.

Due dates and the extension

• Form 1041 is due the 15th day of the 4th month after year end: April 15 for a calendar year, September 15 for a May 31 estate. The K-1s go out by the same date. Form 7004 (code 04 estate, code 05 trust) gives an automatic 5½-month extension — September 30 for a calendar year.
• The extension does not extend the time to pay, and it does not extend the beneficiaries’ returns; a beneficiary waiting on a K-1 extends his own 1040. The regulation requires the 7004 to show a proper estimate of the tax (Reg. §1.6081-6); nonpayment does not void an otherwise valid extension, but a knowingly low estimate does (GCM 39014), and the IRS may terminate an extension on ten days’ notice. The course contradicts itself on whether payment is required; pay with it.
• Amending: a new Form 1041 with the “Amended return” box checked, a statement of the changes, and amended K-1s with their box checked.

The §645 election

• What it is. A qualified revocable trust — one treated as owned by the decedent under §676 at death — is treated as part of the decedent’s estate for income tax purposes. One return, under the estate’s EIN, for the election period.
• Who and when. Both the executor and the trustee sign Form 8855; if there is no executor the trustee elects alone. Due by the due date, with extensions, of the estate’s first Form 1041. Timing is fatal; there is no late relief except by ruling. The trust still needs its own EIN for the period before the election and after it ends.
• What it buys. The estate’s fiscal year; the $600 exemption; the estate’s two-year holiday from estimated tax (§6654(l)(2)); the §642(c)(2) permanent set-aside deduction for charitable amounts; the $25,000 active rental allowance under §469(i)(4); eligible S corporation shareholder status for the election period; a single return where the will pours into the trust. Worth making even with an empty probate estate, for the fiscal year alone.
• What it costs. One set of compressed brackets covers both pieces, so accumulated income can be pushed into 37% sooner; the trust and estate remain separate shares for DNI (§663(c)), so the computation is done twice and combined; when the election ends the trust files a short-period calendar-year return.
• The applicable date (Reg. §1.645-1(f)): if no Form 706 is required, two years after death; if a 706 is required, the later of two years after death or six months after final determination of the estate tax liability (the closing letter or the end of the assessment period). The election ends the day before the applicable date, or earlier if the estate and trust are fully distributed.
• The wind-down. At the end of the election period the trust is deemed distributed to a new trust; it gets its own 1041 going forward on a calendar year, with a short first period. The estate continues or closes on its own.

Study questions 4 and 24

• SQ 4. George dies in November 2019; his estate’s first year may end on the last day of any month through October 31, 2020.
• SQ 24. A calendar-year simple trust that extends its 2019 return has until September 30, 2020.

Private reference, not client advice. Notes taken from two continuing-education courses: Form 1041: A Practical Guide (Hadges & Zollars, Thomson Reuters Checkpoint Learning, 10 hours, written on 2019 law) and Taxation of Trusts, Estates, and Decedents (DeScherer & Rodda, CeriFi, 2025 printing on 2024 law). Figures and rules brought current to 2026 in October 2026 (P.L. 119-21, Rev. Proc. 2025-32, T.D. 9918). Items tagged check are to be confirmed against primary sources before they are relied on.