n-16-19.pdf

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Part III - Administrative, Procedural, and Miscellaneous

Date for Compliance with Consistent Basis Reporting Between Estate and Person
Acquiring Property from Decedent

Notice 2016-19

SECTION 1: PURPOSE
On July 31, 2015, the President of the United States signed into law the Surface
Transportation and Veterans Health Care Choice Improvement Act of 2015, Public Law
114-41, 129 Stat. 443 (Act). Section 2004 of the Act added new sections 1014(f) and
6035. On August 21, 2015, the Treasury Department and the IRS issued Notice 2015-
57, 2015-36 IRB 294. That notice delayed until February 29, 2016, the due date for any
statements required under section 6035(a)(3)(A) to be provided before February 29,
2016. This notice provides that executors and other persons required to file or furnish a
statement under section 6035(a)(1) or (a)(2) before March 31, 2016, need not do so
until March 31, 2016. This notice is being issued in order to provide executors and such
other persons the opportunity to review the proposed regulations to be issued under
sections 1014(f) and 6035 before preparing a Form 8971 and any Schedule A.
SECTION 2: BACKGROUND
Section 1014(f) provides rules requiring that the basis of certain property
acquired from a decedent, as determined under section 1014, may not exceed the value
of that property as finally determined for federal estate tax purposes, or if not finally
determined, the value of that property as reported on a statement made under
section 6035.

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Section 6035 imposes new reporting requirements with regard to the value of
property included in a decedent’s gross estate for federal estate tax purposes.
Section 6035(a)(1) provides that the executor of any estate required to file a
return under section 6018(a) must furnish, both to the Secretary and to the person
acquiring any interest in property included in the decedent’s gross estate for federal
estate tax purposes, a statement identifying the value of each interest in such property
as reported on such return and such other information with respect to such interest as
the Secretary may prescribe.
Section 6035(a)(2) provides that each person required to file a return under
section 6018(b) must furnish, both to the Secretary and to each other person who holds
a legal or beneficial interest in the property to which such return relates, a statement
identifying the information described in section 6035(a)(1).
Section 6035(a)(3)(A) provides that each statement required to be furnished
under section 6035(a)(1) or (a)(2) is to be furnished at such time as the Secretary may
prescribe, but in no case at a time later than the earlier of (i) the date which is 30 days
after the date on which the return under section 6018 was required to be filed (including
extensions, if any) or (ii) the date which is 30 days after the date such return is filed.
Section 6035(b) authorizes the Secretary to prescribe such regulations as
necessary to carry out section 6035. Section 7805(a) provides generally that the
Secretary shall prescribe all needful rules and regulations for the enforcement of this
title, including all rules and regulations as may be necessary by reason of any alteration
of law in relation to internal revenue. Section 7805(b)(2) provides that regulations may

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apply retroactively if they are issued within 18 months of the date of the enactment of
the statutory provision to which they relate.
SECTION 3: GUIDANCE
Statements required under sections 6035(a)(1) and (a)(2) to be filed with the IRS
or furnished to a beneficiary before March 31, 2016, need not be filed with the IRS and
furnished to a beneficiary until March 31, 2016. The Treasury Department and IRS
recommend that executors and other persons required to file a return under section
6018 wait to prepare the statements required by section 6035(a)(1) and (a)(2) until the
issuance of proposed regulations by the Treasury Department and the IRS addressing
the requirements of section 6035. The Treasury Department and the IRS expect to
issue proposed regulations under sections 1014(f) and 6035 very shortly.
SECTION 4: EFFECTIVE DATE
This notice is effective on February 11, 2016. This notice applies to executors of
the estates of decedents and to other persons who are required under section 6018(a)
or (b) to file a return if that return is filed after July 31, 2015.
DRAFTING INFORMATION
The principal author of this notice is Eliezer Mishory of the Office of the Associate Chief
Counsel (Procedure & Administration). For further information regarding this notice,
please contact Theresa Melchiorre at (202) 317-6859 (not a toll-free call).