topic 1041 Turbotax overrides actual trust creation date with 1st of the month in Get your taxes done using TurboTax

1041 Turbotax overrides actual trust creation date with 1st of the month

jeff_ttx — Wed, 18 Mar 2020 19:15:45 GMT

I'm using Turbotax business to do an estate return and several trust returns, using the calendar year method. In the "General Info / About your trust or estate" section, I entered the date of creation, 2/17/2019 for example. I also select the box for "short tax year". But when I print the finished tax returns, I find that Turbotax has substituted 2/1/2019 at the top of the 1041. It looks like this:

"For calendar year 2019 or fiscal year beginning Feb 1, 2019 and ending Dec 31, 2019".

Why do they do this ? The trust wasn't even in existence until Feb 17th. Is it a bug ? Should I use Go To Forms and override it to 2/17/2019 ?

Re: 1041 Turbotax overrides actual trust creation date with 1st of the month

Anonymous_ — Wed, 18 Mar 2020 19:48:38 GMT

@jeff_ttx wrote:
Should I use Go To Forms and override it to 2/17/2019 ?

That is not necessary since the form already contains the entity creation date.

Re: 1041 Turbotax overrides actual trust creation date with 1st of the month

jeff_ttx — Thu, 19 Mar 2020 00:05:28 GMT

I wanted a more definitive answer, with a cite. I found two answers on the net:

"The first return for the the irrevocable trust is filed for the period beginning with the date of the death (of the last parent) and ending on Dec. 31 of the same year". By Mary Kay Foss, CPA at calcpa.org

"If the grantor dies Sept. 13, you have to report the trust's income from Sept. 13 to Dec. 31".

From finance.zacks.com

These two answers support my belief that I should use the date of death of the last surviving parent as the beginning date of the calendar year tax period at the top of the 1041. This is for the initial tax return for an irrevocable trust.

Re: 1041 Turbotax overrides actual trust creation date with 1st of the month

Anonymous_ — Wed, 25 Mar 2020 23:31:41 GMT

Neither one of the sources you quoted could even remotely be considered "cites" (which term would be to authority directly from Congress, Treasury Department, or IRS).

Regardless, although you can stress as much as you like about the date at the top of the return, for a trust (1041) that is not selecting a fiscal year, you can simply select "calendar year" and file on that basis.

Calendar years generally end on December 31st and returns for calendar year trusts/estates are normally due April 15th (but due July 15th for 2019 fed returns - check state due dates below), so the point here is actually moot.

https://blog.turbotax.intuit.com/tax-news/is-the-tax-deadline-delayed-what-to-know-about-coronavirus-covid-19-and-your-taxes-46320/#state-tax-updates

[Edited 3/25/20 to reflect IRS extended 2019 dates]