Monday, September 28, 2015

Deadline for Estate Executor Reporting Basis to Beneficiaries is Delayed

As we reported last month one tax provision included in the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, (PL 114-41) requires executors of estates that file a Form 706 to report the basis of inherited assets to the beneficiary that inherited the property.  This reporting is to take place no later than the earlier of 30 days from the due date, including extensions for filing Form 706, or 2) 30 days from the date the return is actually filed.  This reporting has to be made to the beneficiary as well as the IRS.  The Act also said the reporting would be determined by IRS in the manner and on any form IRS dictates.

This reporting is required for all estate tax returns filed after July 31, 2015.  Therefore executors who filed a Form 706 on August 1, 2015 would have to make this report to the beneficiaries no later than August 31, 2015.  Obviously Congress asking IRS on July 31, 2015, to get the form and manner created in time for executors to meet an August 31, 2015, due date is asking a lot.  IRS has responded by issuing Notice 2015-57 which extends the due date for this reporting until February 29, 2016.  The Notice also asks taxpayers to NOT submit anything regarding this reporting until IRS issues the form or other guidance. This does not mean the Form 706 can be delayed, even if just claiming the spousal exemption carryover, it merely means the reporting of the information for the uniform basis is delayed.

The Notice also gives an address if you are interested in submitting any comments on this new reporting.

This text has been shared with you courtesy of David & Mary Mellem, EAs and Ashwaubenon Tax Professionals.

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