IRS Looking to Ease Worries with Final Estate Basis Rules
The Internal Revenue Service is committed to addressing concerns stemming from controversial estate basis consistency regulations, an official said today.
To do that, the agency is looking for more comments on “where there is a hitch” with proposed rules (REG-127923-15) issued in March, Theresa Melchiorre, an attorney in the IRS Office of Chief Counsel, Passthroughs and Special Industries, said at the American Institute of CPAs Advanced Estate Planning Conference. The regulations require that the basis of assets received from a decedent be consistent with the basis reported on the estate tax return.
Melchiorre is part of a working group looking for the “best solutions” for the proposed regulations, which fall under tax code Sections 10141 and 6035. Because the information reporting requirement was effective immediately, according to the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (Pub. L. No. 114-41), Melchiorre said the IRS “scrambled to get together guidance.”
Final regulations will address the treatment of retirement accounts that have basis, such as Roth IRAs, she said.
The IRS will further clarify in final regulations what property executors must report on Form 8971 Schedule A, Information Regarding Beneficiaries Acquiring Property from a Decedent, she said. The proposed rules say all property must be reported except cash and household goods worth less than $3,000, but commenters have asked whether cash also includes accounts receivable, bonds or promissory notes, she said. Because those types of properties aren’t excluded in the proposed regulations, “we suggest it’s prudent to list these properties,” she said.
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