Basis Consistency and Form 8971

Breaking News!! During tax season, IRS planted a couple of nuclear bombs in its newly issued Form 8971 Basis Consistency Regulations:

1. IRS' all new ZERO BASIS rule: If tax matters are mishandled at the estate level, the beneficiary's basis (for income tax purposes) in an inherited asset is ZERO!!

2. SUBSEQUENT TRANSFER rule: Any later transfer by a beneficiary (of an asset originally subject to Form 8971 reporting) itself must be reported on a newly generated Form 8971 (and related Schedule A).

IRS Form 8971 (and its Schedule A) is the controversial brand new form an estate must complete to report basis of inherited assets to IRS (and beneficiaries). There's a whole lot more to it than meets the eye for income and estate tax professionals.

**This course is approved by the IRS. The submission of a completed request form, found under the materials tab, is required for credit. Please send completed form to leighanne.conroy@acpen.com.


*To enlighten as to how Congress has mandated basis consistency in a broad variety of contexts, including how the 3 year period of limitations for tax assessment may be extended to 6 years, as well as basis of assets inherited by beneficiaries

*To explore the timing and detail of new IRS Form 8971 and the devastating consequences of failure to comply with the vast array of Congress', Treasury's and IRS’ new rules


*Due date of Forms 8971 (that were otherwise due) put off by IRS until June 30, 2016

*Penalties for non compliance can be financially disastrous

*Highway Funding Bill (P.L. 114-41) created basis mania with 5 new statutes, including: 1. New IRC §1014(f) – Heirs must use the estate tax value of assets received from an estate as their income tax basis 2. New IRC §6035 – Executors must report estate tax value of assets to IRS and heirs 3. IRC §6501 – 6 year statute of limitations (on assessment) expanded to apply where overstatement of asset basis omits more than 25% of gross income stated on return

*IRS issued Form 8971 and prop/temp regs in response

*The breadth and depth of this new topic will catch the unsuspecting badly off guard

*How to avoid the impending doom of IRS' new ZERO BASIS rule

*What every income tax and estate tax planner must know about the SUBSEQUENT TRANSFER rule and all new Supplemental reporting

*Critical new protocols to follow in planning, estate tax and income tax preparation and client communication

Additional Information

Designed For

Those desiring to understand the broad, hard hitting impact and surprisingly far reach of Congress', Treasury's and IRS' new basis consistency rules. Income tax planners, estate planners and affected taxpayers who desire to maintain advantage and comply with the broadly applicable and potentially punishing new rules.



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