Taxation & Estate Planning

What Tax form do I use for Deaths in 2010.

By Deirdre Wheatley-Liss

While there is no estate tax in 2010, there is still a tax form to be filed with the federal government in relation to the estates of people who died in 2010.  As discussed in greater detail here, where a person has died in 2010 their executor has an opportunity to allocate $1.3 million to the basis of their assets (plus an additional $3 million for assets passing to a surviving spouse).  The great question is "How?".

We tax attorneys are good at following the often complicated rules the IRS lays out, but here there is a total absence of direction.  The IRS has promised to issue a new Form 8939 to allocate basis as set forth in 1022 of the Code.  However, this is what the website for that form currently says:

Form 8939 in Development
Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent, is in
development and will be posted here shortly. Disregard all prior drafts.  

Not exactly helpful.  

So what is an Executor or Personal Representative to do to meet their tax filing obligations where a person died in 2010?  Our office is preparing a spreadsheet with all the information required under Section 1022 and having it attached to the decedent's final 1040 being filed April 15, 2011.

Full post as published by New Jersey Estate & Elder Planning Blog on December 09, 2010 (boomark / email).