Critter#2: To file a FY2017 form 1041, one uses the "1041...2016...for calendar year 2016 or fiscal year beginning___,2016, and ending ____."Thus for a FY2017 (FY is defined by the end date, not the beginning), one uses this "2016" form in addition to the "2016" K-1's to send to the IRS. However, my understanding is that the beneficiaries should receive a K-1 labelled "2017" appropriate for the calendar year which corresponds to their filing status. Though this is quite confusing, it makes sense, considering that an estate with a fiscal year ending in January (or November) of 2017 could distribute income up until the end of that fiscal year, so the IRS certainly wouldn't expect (or allow) beneficiaries to wait until then to file 2016. Based on my reading of IRS instructions, I believe you are mistaken that FY is defined by beginning date. My question remains, though the answer may well be to send them the form that says at the top: "2016 For calendar year 2016, or tax year beginning Feb 1, 2016, and ending Jan 31, 2017," and expect them to figure out that for them it means calendar year 2017. A trusted family member (retired CPA who uses turbotax!) told me that I should use 2017 form to send to beneficiaries. He may be mistaken about that one detail. He also indicated that regardless of when the interest was distributed, it should be declared by the beneficiaries in the calendar year with the same # as the estate FY. Yeah, weird stuff to the layperson. So the only real problem is the lack of a self-explanatory K-1 form for the recipient.
