@vickynbrian wrote:
Am I stuck making this her initial return and having to do a final return next year?
No, you are not stuck having to prepare and file two tax returns (1041). You can file an initial and final return based on a fiscal year.
The estate's fiscal year will begin on February 28, 2021 and end on January 31, 2022.
The key to this is you will make a 663(b) election for the estate. With a 663(b) election, a distribution made within 65 days of the close of the estate's tax year can be treated as if it were made during the preceding tax year.
As a result, the distribution you made on February 8, 2022 would be considered to have been made during the fiscal year you elected on the estate's 1041.
@vickynbrian
