For family members, lawyers and accountants of heirs of decedents dying in 2010, there is some relief from the IRS regarding filing requirements. On March 31, 2011 the IRS issued a statement explaining that the new Form 8939 will not be due on April 18, 2011. Instead, the form will be due in the near future but would allow for reasonable time for administrators of estates to prepare and file the form. Currently, there is no final version of Form 8939 available for administrators to use and previous statements from the IRS have indicated that the form will be due 90 days after the final version is released.
Form 8939 allows administrators of estates to opt-out of estate taxes. Since the United States has effectively had some form of estate taxes since the late 1790s, this comes as a foreign concept to many accountants and lawyers. The new form allows administrators to allocate basis of property acquired from a decedent for income tax purposes. Additionally, because it is an “opt-out” process, certain estates may choose to “opt-in” to the current estate tax laws. The current laws allow an exemption of $5 million and thus it is only estates valued at over that amount that would benefit from the “opt-out” procedure.
If you need assistance filing form 8939 or want to discuss the advantages of opting in, or out, of estate taxes for 2010, contact