# 1808. Exempt Amounts for Short Taxable Years

## 1808.1When does a short taxable year occur?

A short taxable year is a taxable year of less than 12 months. It may occur when an individual:

1. Dies before November 11, 1988; or

2. Changes from one taxable year to another, usually from a calendar to a fiscal year or from one fiscal year to another.

Congress eliminated the short taxable year for deaths that occur on or after November 11, 1988. The number of months in such taxable year of death is 12.

## 1808.2How is the exempt amount computed for a short taxable year?

The exempt amount for a short taxable year is figured by multiplying the monthly exempt amount by the number of months in the short taxable year. The monthly exempt amounts in §1807.5 are used to compute the exempt amounts for a short taxable year.

If a beneficiary dies in any month of the taxable year that he or she would have attained FRA, the year of FRA attainment exempt amount is used.

Miss Rose's date of birth is August 29, 1935. She is on a calendar taxable year and died on October 15, 2000. Her exempt amount is thus \$17,000, the exempt amount for the year of FRA attainment for 2000. If 2000 is her initial grace year, the monthly exempt amount of \$1,417 for the year of FRA attainment is used in determining non-service months.

Dr. Carey's date of birth is December 2, 1935. He is on a calendar taxable year and died on October 26, 2000. Although he had not turned FRA before his death, his exempt amount is \$17,000, the exempt amount for the year of FRA attainment for 2000.

Last Revised: Jan. 17, 2003