Proposed Regulations

In June the ABA’s Section of Real Property, Trust and Estate Law sent its comments to the IRS on the Proposed Regulations on consistent basis. A wide variety of technical improvements were suggested. Four substantive changes also were included:

  • Reporting requirements should cease when an asset has been included in a subsequent estate.
  • Pecuniary bequests are treated as a sale of estate assets, so no basis reporting should be necessary as to these heirs.
  • There is no statutory authority for the “zero basis” rule for property not included in the estate tax return, so these parts of the Regulations should be dropped.
  • Similarly, there is no statutory authority for the “subsequent transfer” reporting requirement, which hypothetically could go on for generations. This also should be dropped, but if not dropped, a time limit should be added to the reporting requirement.

Substantial comments also were offered by the ABA Tax Section, the State Bar of Texas, the American Bankers Association, the New York City Bar Association, and the American Institute of CPAs.

(August 2016)

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