Proposed Regulation section 1.1014-10(b) defines this property as property includible in the gross estate under IRC section 2031, as well as property subject to tax under IRC section 2106, that generates a federal estate tax liability in excess of allowable credits. The consistent basis requirement of IRC section 1014(f)(1) applies only to property whose inclusion in the decedent’s gross estate for federal estate tax purposes increases the federal estate tax liability payable by the decedent’s estate. Property that Increases Estate Tax Liability The property for this purpose includes any other property the basis of which is determined in whole or in part by reference to the basis of the property acquired from the estate or as a result of the death of the decedent - for example, as a result of a like-kind exchange or involuntary conversion. This limitation applies to the property whenever the taxpayer reports to the IRS a taxable event with respect to the property (for example, depreciation or amortization) and continues to apply until the property is sold, exchanged, or otherwise disposed of in one or more transactions that result in the recognition of gain or loss for federal income tax purposes.
Proposed Regulation section 1.1014-10(a)(1) provides that a taxpayer’s initial basis in certain property acquired from a decedent may not exceed the “final value” of the property as that term is defined in section 1.1014-10(c).
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The proposed regulations request comments by Jand it is anticipated that a number of professional organizations will oblige.Ĭonsistency of Basis with Estate Tax Return On March 4, 2016, the IRS published proposed regulations under IRC sections 1014(f) and 6035, which are summarized in this article. The IRS has on three separate occasions issued notices postponing the filing deadlines, with the most recent notice pushing back the filing deadline for Form 8971 until June 30, 2016. It originally gave the IRS until Augto do so – only 30 days.
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Department of the Treasury and the IRS to figure out how to implement these rules. The act also enacted related penalty provisions under IRC sections 6662, 67.Ĭongress left it to the U.S. These new statutory provisions apply to federal estate tax returns filed after Jand have two primary components: (1) a substantive rule requiring basis consistency that is set forth in IRC section 1014(f) and (2) reporting requirements imposed upon executors and certain other persons under IRC section 6035. The Highway Act, among other things, added new provisions to IRC sections 1014(f) and 6035 concerning basis consistency and reporting for property acquired from a decedent. On July 31, 2015, President Obama signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (the “Highway Act”) into law.
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