ESTATE ADMINISTRATION: FISCAL OR CALENDAR YEAR?

May 30, 2023 | Estate Administration, Estate Planning, Financial

ESTATE ADMINISTRATION: FISCAL OR CALENDAR YEAR?

 

As the executor of an estate, one of the major choices you’ll make is whether to choose the calendar year or the fiscal year as the estate’s taxable year. You’ll have a choice because the estate is its own separate entity. Unlike an individual, however, the estate need not use the calendar year as its taxable year.

What’s the difference?

A calendar year ends on December 31st of the year in which the decedent passed.

A fiscal year begins on the day of the decedent’s death and ends on the last day of the month prior to the first anniversary of that individual’s death. For instance, if the decedent died in May 2023, their estate’s fiscal year would begin on the date of their death (May 2023) and end on April 30th, 2024.

When is the choice made?

The executor must make the choice of taxable year on the estate’s first fiduciary income tax return.

What is the purpose of the tax year selection?

The main purposes of the tax year selection are to maximize tax deferral and to minimize the tax burden on the estate.

What’s the right choice?

Most executors choose the fiscal year because it gives them more time to handle the tasks necessary to file the estate’s fiduciary income tax return.


Need assistance with estate planning or estate administration? The attorneys at SGW Law are here to help. Contact us by email or phone for immediate assistance.
609-409-3500

 

 



Contact us now

For a Private Consultation

Latest Blog Posts

Common Estate Planning Questions

Common Estate Planning Questions     What is Probate? Probate is the process through which an executor or administrator gathers the assets of a deceased person, pays their taxes and their debts, and finally transfers any remaining assets to the decedent’s...

So You Think You Need an Expert: A Cautionary Tale (Part II)

So You Think You Need an Expert: A Cautionary Tale Part II: How to Choose an Expert   A. Can We Use Our Pediatrician? Your pediatrician is your child’s regular physician. They perform health exams, do wellness checkups, give vaccinations, and diagnose and treat...

Special Needs Trusts for People with Disabilities

Special Needs Trusts for People with Disabilities     What is a Special Needs Trust? A Special Needs Trust (SNT) is an estate planning tool that permits parents, grandparents, guardians, or a court to set aside money or property or both for the person with a...

So You Think You Need an Expert: A Cautionary Tale

So You Think You Need an Expert: A Cautionary Tale   Part I: Mistakes Parents Make When Seeking a Better IEP or 504 Plan Parents may know their children best, but it is virtually impossible for a parent to have the training and experience to identify and assess...

AVOIDING INTESTACY: KNOWLEDGE IS POWER

AVOIDING INTESTACY: KNOWLEDGE IS POWER   What is Intestacy? The word originates in the Latin “in testatus,” meaning no witness. It means you die without a written asset distribution plan, called a will. If you die without a will, you die intestate. What are the...

Categories

Year Published