In a letter to the Internal Revenue Service earlier this week, ABA commented on a proposed rule requiring executors of certain estates to report the basis of property acquired to the beneficiaries and the IRS in Form 8971, requesting clarity on several points and recommending that certain provisions be eliminated before the final rule is issued.
Specifically, ABA called on the IRS to clarify that executors have no obligation to submit Form 8971 to either the IRS or beneficiaries in cases where the estate is liquidated and distributions of “excepted property,” such as cash, are made to beneficiaries. In addition, ABA requested that the list of “excepted property” include cash in any financial account, cash in foreign currencies, life insurance proceeds, bond proceeds and other interests that are payable in cash, as well as any property that is sold, exchanged or otherwise disposed of, regardless of whether there is a capital gain or loss. The association opposed a provision regarding the treatment of after-discovered or omitted property, and another provision that would impose Form 8971 reporting requirements on beneficiaries of property who subsequently make gifts of that property to family members.
ABA added that the IRS should further delay the current compliance date of June 30, 2016, until the final rule is released.
For more information, contact ABA’s Phoebe Papageorgiou.