There is both good and bad news concerning some of the recent changes in estate tax law. One piece of good news for taxpayers is the fact that the estate tax exemption for both individuals and married couples is going to increase. One new added burden that will be placed on taxpayers is a requirement of having to file an IRS Form 8971 with Form 706. The purpose of this requirement is to make sure that the value reported on the assets in the estate tax return is the same as the value reported by the beneficiary on the sale of those assets. This Form 8971 will make it easier for the IRS to track the basis of an estate’s assets. These changes will place more stringent reporting requirements on executors, accountants, and attorneys who are preparing estate tax returns.
See John P. Dedon, Good News and Bad News- Reporting Assets’ Basis Upon Death, The National Law Review, February 24, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.
