Expanded Cost Basis Reporting on Estates
Neiffer: “For farmers who are inheriting assists or their parents have passed away and they have a lot of farm land that creates a taxable estate. They need to be aware that if they are an executor — there is a requirement that was passed in last year’s tax law. A requirement that you have to report the tax basis or the fair market value of all assets within the estate other than cash which we know what the basis is. You have to report that basis to the IRS and the beneficiaries. And then if the beneficiaries actually gift that asset away, they then have to file another form letting the IRS know that they have transferred over to another beneficiary. This is going to add a little bit of complexity. That filing requirement is 30 days after the estate is essentially done or when the estate tax return is filed — whichever is earlier. The IRS has just come up with the form that you report this on. They’ve given an additional extension for those people who passed away last year until June 30th of this year. It is just something to be aware of.”
The IRS basis form is 8971.