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Abstract: 

Executors filing federal estate tax returns after July 2015 have an additional reporting obligation under the new “Basis Consistency Rules” with IRS Form 8971. The new rules impose harsh tax penalties for both executors and beneficiaries for noncompliance, with no remedies for mistakes or late filing. Executors are now required to report to beneficiaries the values of inherited assets as reported on the federal estate tax return--information that was previously not disclosed to beneficiaries. In turn, beneficiaries are now required to use the reported value of the inherited assets as their cost basis for both depreciation and gain or loss purposes.

Keywords: estate tax filing, basis consistency rules, Form 8971, basis of inherited property

Affiliations:  1: Ramsbacher Prokey Leonard LLP.