New Law Requires Consistent Tax Basis Reporting

By: David J. DelFiandra, Esq.

The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 was signed into law on July 31, 2015.

Part of the new law imposes tax basis reporting requirements on Executors of Estates. If a Federal Estate tax return is required to be filed, the Executor must notify the beneficiaries of the Estate of the tax basis for the assets the beneficiaries inherit. The tax basis of the asset cannot exceed the value as reported on the Federal Estate Tax Return (Form 706). The reporting notice must be made within 30 days of the earlier of (i) the filing date of the Federal Form 706 or (ii) the due date of the Federal Form 706. The reporting notice must be sent to both the IRS and the beneficiaries. Failure to send the notices may subject the Executor to penalties under Sections 6721 and 6722 of the Internal Revenue Code. Failure to use a consistent basis subjects the taxpayer/beneficiary to a 20 percent accuracy related penalty for understatements.

The new rules apply immediately for any Estate tax return required to be filed after July 31, 2015.

Leech Tishman’s Estates & Trusts Practice Group is able to assist with questions you may have regarding estate law.

David J. DelFiandra is a Partner in the Estates & Trusts Practice Group in Leech Tishman’s Pittsburgh office. He can be reached at 412.261.1600 or

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