Article on New Reporting Requirements & Basis Consistency Rules

Nelson H. Hunt recently published an Article entitled, Congress Passes New Reporting Requirements and Basis Consistency Rules Under IRC §§ 6035 and 1014(f), 30 Prob. & Prop., no. 5, 21 (2016). Provided below is a summary of the Article:

On July 31, 2015, President Obama signed into law the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Pub. L. No. 114–41, 129 Stat. 443 (the “2015 Act”). The 2015 Act created two new provisions in the Internal Revenue Code, IRC §§ 1014(f) and 6035. IRC § 1014(f) provides the new “basis consistency requirement.” IRC § 6035 provides new reporting requirements on executors, who now, in addition to filing Form 706, must file new Form 8971 and furnish its Schedule A to beneficiaries of the estate. The 2015 Act also provides failure-to-file penalties for the reporting requirements and a 20% underpayment penalty for an “inconsistent estate basis.” On January 29, 2016, the IRS published Form 8971, “Information Regarding Beneficiaries Acquiring Property from a Decedent.” On March 4, 2016, the Treasury published proposed regulations under both IRC § 1014 and IRC § 6035. See 81 Fed. Reg. 43, at 11, 486.