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Estates have until June 30 to file estate basis form

By Sally P. Schreiber, J.D.

Please note: This item is from our archives and was published in 2016. It is provided for historical reference. The content may be out of date and links may no longer function.

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The IRS announced that it is delaying the deadline for filing Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent, until June 30, 2016 (Notice 2016-27). The latest delay in this filing deadline came in response to numerous comments from the public (including the AICPA) that executors and others who are required, under Sec. 6035(a)(3)(A), to file the form did not have sufficient time to adopt the systemic changes that would enable the filing of an accurate and complete Form 8971 and its Schedule A. 

Under the notice, Forms 8971 and Schedules A that would have been required to be filed with the IRS or furnished to beneficiaries before June 30, 2016, do not have to be filed until June 30, 2016.

When Sec. 6035 was enacted on July 31, 2015, it was effective immediately. It requires consistent reporting of basis between an estate and anyone acquiring property from the decedent and imposes reporting requirements. The law requires the statements to be furnished to the IRS and to beneficiaries within 30 days of an estate tax return’s due date. For estates that had returns due Aug. 1, 2015, the statements were originally due by Aug. 31, 2015. Because of the short time frame between enactment and the due date, in August 2015 the IRS delayed the deadline to Feb. 29, 2016, and later to March 31, 2016.

Proposed and temporary regulations governing the requirement were officially published March 4, but they retained the March 31 due date, which meant executors and practitioners had less than a month to review the new rules and file Form 8971, an especially challenging task since it fell during the busiest time of the year for many tax practitioners.

On March 4, the AICPA sent a request to the IRS, asking for a further 60-day extension, arguing that many executors are likely unaware of the new rule and, until the proposed regulations were issued, had no way of knowing how to comply with the information-reporting requirement.

—Sally P. Schreiber (sschreiber@aicpa.org) is a JofA senior editor.