Fiscal Year Confusion

[TaxGuyBill]

I rarely work with Fiscal Years or "short" years, and I'm having a hard time wrapping my head around this fairly simple question (or maybe it is the fact I've already had a couple of drinks today  😋 )

Entity (trust) has Fiscal Year of Feb 1st, 2020 through January 31st, 2021.  The K-1 goes on the 2021 personal tax return, right?

But what about next year when the Trust files a final and "short" year?  So let's say the year would be February 1st, 2021 and as a "short year" it ends June 30th, 2021.  That K-1 ALSO goes on the 2021 personal tax return, right?  So the 2021 tax return would show BOTH K-1s?

[PATAX]

@TaxGuyBill I am not sure about that Bill..... I have an entity it is not a trust but the fiscal year end is May 31st 2021 and they file a 2020 return... Another entity also is not a trust but the fiscal year end is June 30th 2021 and it also files a 2020 return for that fiscal year... But I'm not sure about trusts...

[Accountant-Man]

Trusts aren't supposed to have fiscal year ends, but let's leave that.

Yes, you will have 2 k1s ending in 2021. Both go on the 2021 F1040.

[PATAX]

I thought I had read before that they were not supposed to have fiscal year ends... Thanks for the information accountant man....

[TaxGuyBill]

Thank you!

I didn't know about the non-fiscal Trusts.  Thanks for that information.

[arandersen]

Trusts cannot have fiscal years, but there is a twist.  Estates CAN have fiscal years and if a client has a living trust and then dies, that trust can elect to be included in the estate's income tax return, so in that case, the trust, as part of the estate, can have a fiscal year, but only because it is part of an estate.

[TaxGuyBill]

Ah, got it.  This is living-trust then died situation, and I was trying to figure out if that election should be done or not (the Estate doesn't have any income).