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Estates & Trusts

Form 8971: Information Regarding Beneficiaries Acquiring Property from a Decedent

By February 18, 2016No Comments

The Surface Transportation and Veterans Health Care Choice Improvement Act, otherwise known as the Highway Bill, was enacted into law on July 31, 2015. This law imposes a reporting obligation on executors of estates, requiring them to report estate tax values to both the IRS and the beneficiaries using Form 8971, which became final on January 29, 2016. The purpose of this new reporting requirement is to better insure consistent basis reporting upon sale or transfer of an inherited asset.

Estates are required to file the form within 30 days of the due date of the tax return (including extensions) or the actual filing date, whichever comes first. The new reporting requirements affect estates that filed Form 706 after July 31, 2015. The original due date for late forms was February 29, 2016, but that due date has been extended to March 31, 2016.

Estates exempt from this reporting requirement are ones that filed Form 706 solely to elect portability or to make an allocation or election respecting the generation-skipping transfer tax.

The form is brand new so we are waiting for additional guidance from the Treasury Department. If you think you may be subject to this filing requirement and need additional information or assistance, please contact our office.

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