As discussed in the previous posts, executors must now be aware of their responsibility to file newly created IRS form 8971, titled, “Information Regarding Beneficiaries Acquiring Property From a Decedent.” Form 8971 (including all attached Schedule(s) A) must be filed with the IRS and only the Schedule A is to be provided to the beneficiary listed on that Schedule A.
Example: Sam Sutter of Smithtown, NY died on November 1, 2015. At the time of his passing he owned his home in Smithtown, a second home in Commack, NY, investments in the bank and stocks. Mr. Sutter had prepared a Last Will and Testament naming his daughter, Nicole, from Nesconset, NY, his executrix. His will left any and all property that he owned to his three children: Nicole, Kenneth (from Kings Park, NY), and Henry (from Hauppauge, NY), in equal shares. The total value of his estate is $2,000,000.00. Must Nicole file form 8971 and related Schedule A?
Answer: NO. Mr. Sutter’s gross estate is less than $5,430,000.00 (the basic exclusion amount for estates of decedents who die during 2015).
Internal Revenue Code Sec. 6035, titled, “Basis Information To Persons Acquiring Property From Decedent,” directs the executor of any estate required to file a return under section 6018(a) to furnish to the IRS and to each person acquiring any interest in property included in the decedent’s gross estate for Federal estate tax purposes a statement (Form 8971) identifying the value of each interest in such property as reported on such return and such other information with respect to such interest as the Secretary may prescribe.
Further, Internal Revenue Code Sec. 6018(a) states that an estate tax return is required when the decedent’s gross estate exceeds the basic exclusion amount in effect under section 2010(c) for the calendar year which includes the date of death. Because Mr. Sutter’s estate is below $5,430,000.00, Nicole is not required to file an estate tax return and is also not required to file form 8971.
To be continued….
Aaron E. Futterman, CPA, Esq. is a partner in the law firm of Futterman & Lanza, LLP with offices in Smithtown, NY and clients throughout Suffolk, Nassau, Queens, Brooklyn, Bronx, Richmond, New York, Westchester and Rockland Counties. He concentrates his practice to Elder Law, Medicaid Planning, Medicaid Applications, Estate Planning, Probate, Estate Taxes, and Estate Administration.