Estate Basis Consistency Rules: A Collection of Expert Analysis

As part of the Surface Transportation and Veterans Health Care Choice Improvement Act, Congress amended §1014 and added §6035. The amendment to §1014 requires consistent basis reporting (between the estate and the beneficiary) of certain property acquired from a decedent, and §6035 imposes (mainly on the estate) a new reporting requirement regarding the value of property included in the decedent’s gross estate. The IRS issued proposed regulations (REG-127923-15) under both sections in March 2016.

 

 

Given the short due date for reporting basis (30 days after filing Form 706), estate executors and tax professionals preparing Forms 8971 and Schedules A should review carefully the proposed regulations and the instructions to Form 8971 to ensure compliance with the new basis reporting requirements.

 

Any estate filing an estate tax return on or after August 1, 2015 must file Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent, generally 30 days after the due date of the estate tax return; however, in Notice 2016-27, the IRS extended the deadline to June 30, 2016 for certain estate tax returns due on or after August 1, 2015.

 

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