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Most trusts have to use a calendar year. This from the Form 1041 instructions: "Generally, a trust must adopt a calendar year. The following trusts are exempt from this requirement: A trust that is exempt from tax under section 501(a); A charitable trust described in section 4947(a)(1); and A trust that is treated as wholly owned by a grantor under the rules of sections 671 through 679." Note that the extension due date is only 5 1/2 months. Also, the letters assigning EINs to estates and trusts are pre-programmed to use a calendar year. Almost all the estates I do elect a fiscal year, so you can safely ignore the letter. Gail is correct that the reporting period is established when the first 1041 is filed, letter instructions notwithstanding. However, this only applies to estates and exempt trusts.

Sure it is! Using your theory a stand alone insurance business building could only deduct where their desk were located in the building. Please tell what personal use when the "taxpayer" said the boat was purchased for business use, or did he say only his desk was for business? Maybe you are only thinking office in the home deduction? Its not a home.

just wondering how this comes into play: What Can I Deduct? To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.