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STATEMENTS TO IRS & BENEFICIARIES REGARDING BASIS REPORTING POSTPONED UNTIL JUNE 30, 2016
IRS has again delayed the initial due date for providing statements to IRS and
to beneficiaries, under the rules requiring consistent basis reporting for estate
tax and income tax purposes, this time until June 30, 2016. (Notice 201627,
201615 IRB 1)
Background. The executor or administrator of a decedent’s estate must file
the estate tax return. (Code Sec. 6018(a))
If the executor or administrator is unable to make a complete return with
respect to any part of the gross estate, he must include in his return all the
information he has, including a description of such part and the name and
address of every person holding a legal or beneficial interest in such part. If
they are notified by IRS, such legal or beneficial owners must then file returns
as to their parts of the estate. (Code Sec. 6018(b))
On July 31, 2015, President Obama signed into law the Surface
Transportation and Veterans Health Care Choice Improvement Act of 2015
(P.L. 11441;the Act). Section 2004 of the Act enacted Code Sec. 1014(f) and
Code Sec. 6035).
Under the Act, effective for property with respect to which an estate tax return
is filed after July 31, 2015, the basis of any property to which Code Sec.
1014(a) (i.e., the rules for determining basis of property acquired from a
decedent) applies can’t exceed:
(A) In the case of property, the final value of which has been determined
for purposes of the estate tax on the estate of the decedent, such value.
(B) In the case of property not described in (A), above, and with respect
to which a statement has been furnished under new Code Sec. 6035(a)
(see below) identifying the value of such property, such value. (Code Sec. 1014(f)(1))
Code Sec. 6035 imposes new reporting requirements with regard to the value
of property included in a decedent’s gross estate for federal estate tax
purposes.
Code Sec. 6035(a)(1) provides that the executor of any estate required to file
an estate tax return under Code Sec. 6018(a) must furnish, both to IRS and
the person acquiring any interest in property included in the decedent’s gross
estate for federal estate tax purposes, a statement identifying the value of
each interest in such property as reported on such return and such other
information with respect to that interest as IRS may prescribe.
Under Code Sec. 6035(a)(2), each person required to file a return under
Code Sec. 6018(b) must furnish, both to IRS and each other person who
holds a legal or beneficial interest in the property to which such return relates,
a statement identifying the information described in Code Sec. 6035(a)(1).
Code Sec. 6035(a)(3)(A) provides that each statement required to be
furnished under Code Sec. 6035(a)(1) or Code Sec. 6035(a)(2) must be
furnished at such time as IRS may prescribe, but in no case at a time later
than the earlier of: (i) the date which is 30 days after the date on which the
return under Code Sec. 6018 was required to be filed (including extensions, if
any); or (ii) the date which is 30 days after the date such return is filed.
Previous delays. Notice 201557, 201536 IRB 294, provided that, for
statements required under Code Sec. 6035(a)(1) and Code Sec. 6035(a)(2)
to be filed with IRS or furnished to a beneficiary before February 29, 2016,
the due date under Code Sec. 6035(a)(3) was delayed to February 29, 2016.
Notice 201619, 20169 IRB 362, provided the same rule, except with
March 31, 2016 substituted for February 29, 2016.
And, in temporary regulations issued earlier this month,
IRS reiterated the March 31, 2016 date by saying
that executors and other persons required to file or furnish a statement under
Code Sec. 6035(a)(1) or Code Sec. 6035(a)(2) before March 31, 2016, need
not do so until March 31, 2016.
IRS announces second delay.
IRS has now announced that statements
required under Code Sec. 6035(a)(1) and Code Sec. 6035(a)(2) to be filed
with IRS or furnished to a beneficiary before June 30, 2016 need not be filed
with IRS and furnished to a beneficiary until June 30, 2016.