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IRS Estate Tax Return Basis Reporting Rules Delayed

Posted on: September 2nd, 2015
tax report delay
Recently, the Internal Revenue Service announced new reporting rules which require certain executors to furnish the IRS and heirs with basis reports for estate assets. The new rules apply to all estates required to file an estate tax return, effective July 31, 2015. The reports are due within 30 days following the estate tax return due date. However, to allow time for a public comment window and to develop adequate instructions for completion of these reports, the basis report deadline has been postponed to 2016. 

Estate basis reports that would have been due between July 31, 2015 and February 29, 2016 can delay filing until February 29, 2016. 

Executors managing estates for which estate tax returns and estate basis reports must be filed should carefully review the new reporting guidelines. Basis report statements must be sent to beneficiaries who received an interest in property from the decedent’s estate, as well as to the IRS. The value of a property interest on basis statements should align with the value reported on the decedent’s estate tax return. An estate planning or tax attorney can help to clarify rules and examine documents to ensure paperwork is completed properly. 

Executors administering an estate must ensure that tax deadlines are met and tax documents are correctly prepared. The new rule noted above is one of several tax regulations that have changed in 2015. For example, surviving spouses interested in electing portability of their deceased spouse’s unused estate tax exemption previously had one opportunity to elect portability. If the estate tax return was filed without portability election, the right was lost. However, effective June 15, 2015 for certain estates, surviving spouses have a 15-month grace period if their spouse died on or after this date. This other new rule is important to note because a surviving spouse, individually, does not have the legal capacity to elect portability—only the executor may file election.

The extra time the IRS has provided for public comment and guidance on the new estate basis reporting rules should also be used to review other amended rules as described above. Follow our tax attorneys on Twitter @estateplansnc and Facebook for additional updates.

By Attorney Samantha Reichle
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