Estate planners and estate tax advisors have been keenly aware of the recently enacted changes to the Internal Revenue Code (“Code”) affecting basis reporting for assets transferred at death.
Section 6035 of the Code requires executors to file a statement with the IRS that identifies both the basis of assets, as determined for federal estate tax purposes, transferred at death and all of the beneficiaries receiving such assets. A copy of the statement must be provided to the beneficiaries receiving any of the disclosed assets.
According to this newly enacted section, the statement must be filed and provided to the beneficiaries either (i) 30 days after the due date of IRS Form 706 OR (ii) 30 days after the filing of such form.
Shortly after the enactment of this section, the IRS extended the deadline to February 29, 2016 for any required statements as of the effective date of the new law to allow for the drafting of instructions and a form to comply with this requirement.
As of February 11, 2016, the IRS further extended the deadline for the filing of these statements to March 31, 2016. According to Notice 2016-19, the extra month will “. . . provide executors and such other persons the opportunity to review the proposed regulations to be issued under sections 1014(f) and 6035 before preparing a Form 8971 . . .”.
Click on the following link to view a copy of this Notice: IRS Notice 2016-19.
In January of this year, the IRS released a draft of Form 8971 to comply with this requirement (see a draft of the form here: IRS Form 8971.).
Christopher Floss, a Chicago based estate planning and tax planning attorney, is an associate at Hoogendoorn & Talbot LLP. If you wish to contact Christopher, please call 312-786-2250 or email him at firstname.lastname@example.org.