Consistent Basis Reporting

Certain estates are required to report to the IRS and the recipient the estate tax value of each asset included in the gross estate within 30 days of the due date (including extensions) of Form 706 or the date of filing Form 706 if the return is filed late. The basis of certain assets when sold or otherwise disposed of must be consistent with the basis (estate tax value) of the asset when it was received by the beneficiary. To satisfy the consistent basis reporting requirements, the estate must file Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent, separately from the Form 706. Failure to file Form 8971, when required, is subject to information return penalties under sections 6721 and 6722. See Form 8971 and its instructions for more information.