Eight years after issuing proposed regulations, the IRS has finalized regs on inherited property consistent-basis requirements. The Internal Revenue Code requires consistent-basis reporting between an estate and beneficiaries who acquire property from the estate. If an estate is required to file a federal estate tax return, Section 1014(f) provides that the basis reported by persons who inherit property must not exceed the final value of such property as determined for estate tax purposes. A significant change under the final regs is the removal of the “zero-basis” rule for unreported property. The rule was characterized as “onerous, unduly harsh and unfair.” Contact us for details.
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