Minnesota Estate Tax | IRS and Consistent Basis Reporting

Minnesota Estate TaxAs reported by attorney Richard Hawke of the Minnesota State Bar Association (MSBA), the Internal Revenue Service (IRS) released “temporary” and possible future regulations regarding basis consistency and reporting regulations.  Click on this link for the article.  The proposed legislation would be codified under Internal Revenue Code (IRC), sections 1014 and 6035.  These regulations were to take effect on March 2, 2016 with a possible update coming on May 31, 2016.

As reported by attorney Hawke:

“In an ongoing effort to ensure that estate executors and beneficiaries who receive property from an estate report a consistent basis to the IRS, Congress enacted tax code Section 6035. Section 6035 requires the executor of an estate, who is required to file an estate tax return, to provide statements to the IRS and to each beneficiary on the values of any estate property.”

In response to Minnesota probate attorney concerns about this regulation, attorney Hawke reported that:

“On March 2, 2016, the IRS released proposed REG-127923-15, which provides guidance to practitioners on the reporting requirements. The IRS did exclude certain assets based on the comments it received, specifically, the IRS stated that cash, income in respect of a decedent, tangible personal property not requiring an appraisal, and property sold or disposed of by the estate in a transaction where capital gain or loss is recognized—and not distributed to the beneficiary—does not have to be reported. Additionally, tax returns filed solely to claim portability are exempt from the basis consistency requirements”

This issue is ongoing and fluid.  We will update this post with more information when we have it.

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