IRS Issues Long-Awaited Modified Carryover Basis Guidance for Estates

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IRS issues much-anticipated guidance describing the method estate executors are to use in electing to have the carryover basis rules apply rather than the estate tax when property is being transferred as a result of a decedent's death in 2010. The guidance answers key questions that have been looming over implementation of the carryover basis regime, such as what will happen if an estate sold some assets before Dec. 31, 2010, and what happens if more than one executor tries to claim carryover basis for the same assets. Notice 2011-66 addresses what happens if the IRS receives more than one Form 8939, the form for allocating an increase in basis for property acquired from a decedent, and gives several situations in which estates will get relief from having to file the form by Nov. 15, 2011.