As the executor of an estate, you already have plenty of responsibilities, including inventorying and valuing estate assets. Now you need to add one more task to your list.
The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 became law on July 31 and included provisions that require consistent reporting of property values between an estate and the beneficiaries. The new requirement means you’ll have to file a statement with the beneficiaries and the IRS notifying both of the value of the property as reported on the estate return. Unless an exception applies, the beneficiaries, in turn, can claim no more than that value when the property is later sold or disposed of.
The new rule took effect as of July 31, 2015, and applies to estates that must file returns after that date. Under the rule, the statement is due within 30 days after the estate return is filed or 30 days after the due date of the estate return, whichever is earlier.
However, if you’re required to file this new statement before February 29, 2016, you’ll need to wait until the IRS issues guidance before you can comply with the rule. In this situation, IRS Notice 2015-57 delays the due date for filing and furnishing the statement until February 29, 2016.
Note this change has no effect on the general rule that property in an estate typically passes to beneficiaries at the fair market value on the date of death. That continues to be the case.
The IRS expects to issue regulations and forms related to the new provisions before the delayed due date. We’ll keep you advised as information becomes available. If you have any questions or need further explanation, give us a call.
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