You do not need to adjust the dates on the final Form 1040 for your father. When you enter the date of death on the page with "Let's check for some other situations" of the "My Info" section, the program makes any necessary adjustments to account for that.
If your father had an existing trust, the dates of the trust would not change.
If an estate generates more than $600 in annual gross income, you are required to file Form 1041, U.S. Income Tax Return for Estates and Trusts. If your father's estate had or will have sufficient income to require filing a Form 1041 (and the corresponding state return) for the period starting on the date of death and ending on a date chosen by the fiduciary, as follows:
You (as the fiduciary) may choose the estate’s taxable year, but it cannot exceed 12 months. One option is to choose the longest permissible period in order to defer the payment of tax for as long as possible. In that case you would chose a fiscal year that ends with the month preceding the date of death. For example, if father died on September 15, 2024, you could elect a taxable year that ends on August 30. The first year of the estate would be September 15, 2024, through August 30, 2025, and the second year would be September 1, 2025, to August 30, 2026.
If you choose a fiscal year end other than December 31, you may have an issue with reporting investment income. Banks, brokerages, etc. issue IRS Forms 1099 on a calendar-year basis. Choosing a fiscal year end other than December 31 will require you to allocate income and deductions between each calendar year. If you want to simplify the accounting for income tax reporting purposes, calendar-year reporting is the way to go.
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