Report on Proposed Regulations under IRC Sections 1014(f) and 6035 Concerning Consistent Basis Reporting Between Decedents’ Estates and Persons Acquiring Property from a Decedent

SUMMARY

The Estate and Gift Taxation Committee (Paul A. Ferrara, Chair) submitted a comment letter to the Internal Revenue Service on proposed regulations under IRC §§ 1014(f) and 6035 concerning consistent basis reporting between decedents’ estates and persons acquiring property from a decedent.  The Committee highlighted two aspects of the Proposed Regulations that warrant revision:  that Proposed § 1.6035-1(b), which excludes certain property that is sold or otherwise disposed of by the estate (and therefore not distributed to a beneficiary) from having to be reported on Form 8971 and the accompanying Schedule A, also exclude property that is sold or otherwise disposed of in a transaction in which no capital gain or loss is recognized; and that Proposed § 1.6035-1(f) exclude from reporting a transfer to a trust of which the transferor is a deemed owner for income tax purposes where such transfer is an incomplete gift for gift tax purposes and therefore remains includable in the transferor’s gross estate.