IRS Delays New Inherited Property Reporting Requirements
Neiffer: “President Obama signed a new transportation bill on July 31, 2015. And a few of those provisions actually related to income taxes. One of them is if you have a taxable estate — so if someone passes away worth more than $5.43 million this year.The executor is required to file a statement with both the IRS and the heirs letting them know exactly how much value they placed on each item that is part of that estate tax return. There is also a requirement that an heir is not allowed to deduct an amount greater than that — so it is a matching up — like a 1099 reporting. That is technically due within 30 or 31 days after the estate return is filed. But the IRS just released a notice late last week that indicated that they really won’t worry about it until February 29th of next year because they haven’t designed the form for people to fill out.”
Again, this law only applies to those estates that are required to file an estate tax return and those occurring after July 31st of this year. For 2015 estates, this essentially means that the gross taxable estate needs to be larger than $5.43 million. Many farmers will be under this limit, however, Neiffer adds with the rapid increase in land prices over the last few years, it would not take too many good farmland acres to exceed this amount.