Colorado Probate Blog - Wade Ash Woods Hill & Farley, P.C.

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IRS Delays Basis Reporting Again

In Notice 2016-19, 2016-9 IRB, the IRS again delayed the due date for filing the new Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent, reporting the basis in a decedent's estate both to the IRS and to the beneficiaries. The 2015 Form 1041 (U.S. Fiduciary Income Tax Return) includes provisions requiring consistent basis reporting. As noted in earlier blogs, the "Highway Bill" signed into law on July 31, 2015, requires executors of estates and certain heirs filing U.S. Estate Tax Returns (Form 706) on or after that date to file a statement with the IRS, and to report the fair market value of assets on the return to the beneficiaries within 30 days of filing the Form 706. The IRS had delayed the due date for new Form 8971 until February 29, 2016, and has now extended that date again to March 31, 2016. The Form and Instructions are now posted on the IRS website, but numerous questions have been raised, resulting in not only another delayed due date, but a "suggestion" by the IRS that taxpayers wait until proposed regulations are issued to file the return. Proposed regulations are expected "shortly."

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