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New IRS Form Required for Estate Basis Reporting Due Feb. 29

February 5, 2016
Estate Planning Blog Post

On January 29, 2016, just as tax season is heating up, the IRS released the final version of Form 8971 "Information Regarding Beneficiaries Acquiring Property From a Decedent," and its instructions. As a part of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, which was signed into law on July 31, 2015, estate executors are now required to provide the IRS and each beneficiary with the estate tax value of any property which the beneficiary is due to receive. As a result of this newly enacted law, a beneficiary's income tax basis will be the estate tax value of property acquired from the estate. 

Any estate which is required to file an estate tax return (Form 706) after July 2015 is required to file Form 8971 (including all attached Schedule(s) A). An estate must also provide Schedule A to each beneficiary receiving assets from the estate. Both requirements must be met within 30 days after the date on which Form 706 is required to be filed with the IRS, or the date that is 30 days after the date Form 706 is filed with the IRS, whichever is earlier. 

Notice 2015-57 has made February 29, 2016 the due date for all Forms 8971 (including all attached Schedule(s) A) required to be filed with the IRS after July 31, 2015, and before February 29, 2016. Penalties may be imposed for failure to comply with this new filing requirement.

Please contact Varnum if you have any questions about how the new reporting requirements affect you.

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