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New Reporting Requirements for Executors of Estates

Executors must now be aware of their responsibility to file newly created IRS form 8971, titled, “Information Regarding Beneficiaries Acquiring Property From a Decedent.” Newly enacted federal laws require executors of an estate and other persons who are required to file Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return to report the final estate tax value of property distributed or to be distributed from the estate, if the estate tax return is filed after July 2015. The purpose of the form and reporting relates to capital gain reporting and consistent basis reporting between estates and persons acquiring property from a decedent.

The IRS states that “certain property received by a beneficiary may be subject to a consistency requirement, meaning that the beneficiary cannot use a value higher than the value reported on Schedule A as the beneficiary’s initial basis in the property.”

An executor must file …

TO INTERNAL REVENUE SERVICE:

  • Form 8971
  • Every Schedule A, issued to report values to the IRS. One Schedule A is provided to each beneficiary receiving property from an estate.

TO EACH BENEFICIARY:

Each beneficiary is provided only with a copy of that beneficiary’s own Schedule A. Executors are warned (for privacy purposes) — to not provide a copy of the Form 8971 with or without attached Schedule(s) A to any beneficiary.

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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