I am using a fiscal year to file the first and hopefully final estate tax return for my father in law. He died in June 2020. The only income was from the sale of his home in March 2021. This sale resulted in a loss. We are also distributing all proceeds from the sale to the beneficiaries in April 2021 to close the estate. The only deductions are legal fees that occurred in 2020 and 2021, mortgage interest and property taxes that were paid in 2021.
Do I have to file a 2020 estate tax return and then wait until next year to file again to report the sale of the home OR since I am using a fiscal year, can I report the sale of the home and file a final return now, along with K-1s for the 2021 distributions?
