Instead of the Add days, because I believe you always want the day previous in the coming year and you need to take into account leap years, perhaps you can try this approach. I think your main error is that you are sending in a string to .AddDays instead of a double as the method wants.
Just debug through each line of the code and ensure that what is supposed to be happening, is happening. If dtForCalendar2 is correct when you try to assign it to calendar2.SelectedDate, then the issue may be with your calendar2 markup. Could you use the improve question widget and add that markup to your question as well?
DateTime dtForCalendar2 = calendar1.SelectedDate
dtForCalendar2 = dtForCalendar2.AddYears(1.0)
dtForCalendar2 = dtForCalendar2.AddDays(-1.0)
calendar2.SelectedDate = dtForCalendar2