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New Reporting Requirements for Executors of Estates- Part 4

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 $5,000,000.00 and Nicole MUST file a New York State Estate Tax Return (Form ET-706) because Mr. Sutter’s gross estate total’s more than $3,125,000.00.

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). Although Nicole must prepare a Federal form 706 in order to attach it to the New York State ET-706, the federal 706 is not required to be filed with IRS pursuant to Internal Revenue Code Sec. 6018(a). Therefore, Nicole need not file form 8971 or the Schedule A.

Example 2: Same facts as above, except that Mr. Sutter’s estate is valued at $6,000,000.00.

Must Nicole file form 8971 and related Schedule A?

Answer: YES. Mr. Sutter’s gross estate is more than $5,430,000.00 (the basic exclusion amount for estates of decedents who die during 2015).

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.

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