In 2010, those who died got significant tax breaks. The Economic Growth and Tax Relief Reconciliation Act of 2001 eliminated the estate tax for Americans dying in 2010. The Act also enacted IRC § 1022, which modified the carryover basis system, offsetting the tax benefits of the estate tax elimination. However, another act quickly reinstated the estate tax for those dying in 2010, but the decedent could still elect for the modified basis rule of § 1022 in that year only. Recently, on January 19, 2017, the IRS released new regulations for repealed § 1022, noting that this section will still be relevant until all the property bequeathed from a decedent in 2010 is sold or disposed of. The new regulations include references to § 1022 whenever basis is referenced and conform to its mandate when necessary.
See Beth L. Fox, Dead, but Not Forgotten, Wealth Management, January 27, 2017.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
