Client is a beneficiary of a decedent's estate. The estate has a fiscal year beginning 02-15-22 (the date of death) and ending 01-31-2023. The estate's 1041 was promptly filed, and income was passed through to the individual beneficiary on a K-1 that was received 02-15-2023. That individual brought the K-1 to me to be reported on his 2022 personal income tax return.
Even though (i) the individual/beneficiary received the K-1 in time to report it on his 2022 personal return and (ii) the K-1 is printed on the 2022 form, am I correct that this should be reported on the individual/beneficiary's 2023 personal return to be filed in April 2024? My thought is that the Estate could have received its income and made distribution in January 2023, though my client isn't sure of the timing.
Asked more generally, in which tax year does an individual include K-1 on his or her personal return if the entity issuing the K-1 is on a fiscal year basis? Thanks in advance.
