IRS Form 8971 – In the complex world of estate taxes, IRS Form 8971 plays a crucial role in ensuring consistent basis reporting for property passed to beneficiaries. This form, officially titled “Information Regarding Beneficiaries Acquiring Property From a Decedent,” helps executors report the estate tax value of distributed assets, promoting transparency and compliance with tax laws. Whether you’re an executor handling an estate or a beneficiary receiving property, understanding Form 8971 is essential to avoid penalties and ensure accurate tax reporting. In this article, we’ll break down everything you need to know about IRS Form 8971, including its purpose, filing requirements, and key details.
You can download the latest version of IRS Form 8971 directly from the official IRS website: https://www.irs.gov/pub/irs-pdf/f8971.pdf.
What Is IRS Form 8971 and Its Purpose?
IRS Form 8971 is a reporting tool used by executors of estates to inform both the IRS and beneficiaries about the final estate tax value of property distributed from a decedent’s estate. It was introduced to enforce consistent basis rules under Internal Revenue Code (IRC) Section 1014(f), which requires beneficiaries to use the estate tax value as their basis for the property—preventing them from claiming a higher basis to reduce capital gains taxes upon sale.
The form applies specifically to estates where a federal estate tax return (Form 706 or Form 706-NA) is required and filed after July 2015. Its primary goals are:
- To report the value of property acquired by beneficiaries.
- To ensure beneficiaries report the same basis on their tax returns as reported on the estate tax return.
- To provide the IRS with details on property distributions for oversight.
Without this form, discrepancies in basis reporting could lead to underreported taxes or audits. Note that Form 8971 is revised periodically; the current version is Rev. August 2025.
Who Must File IRS Form 8971?
Not every estate requires Form 8971. Filing is mandatory only if:
- The estate is required to file Form 706 (United States Estate (and Generation-Skipping Transfer) Tax Return) or Form 706-NA (for nonresident aliens) under IRC Sections 6018(a) or (b).
- The estate tax return is filed after July 2015, regardless of whether it’s timely.
The “executor” is responsible for filing, which includes the appointed executor, personal representative, administrator, or any person in possession of the decedent’s property if no official executor is appointed. If there are multiple executors, each may file separately for the property they report, but all are jointly responsible for accuracy.
Exemptions include:
- Estates where the gross estate plus adjusted taxable gifts is below the basic exclusion amount (no estate tax return required).
- Returns filed solely for elections like portability, generation-skipping transfer allocations, or protective claims.
- Other estate forms like Form 706-QDT or 706-GS(D).
Even if no beneficiaries receive non-excepted property, the form must still be filed if an estate tax return is required.
When and How to File IRS Form 8971?
Timing is critical for compliance. Form 8971 must be filed by the earlier of:
- 30 days after the due date of Form 706 or 706-NA (including extensions).
- 30 days after the actual filing date of Form 706 or 706-NA.
If the due date falls on a weekend or holiday, it shifts to the next business day. File the form separately from the estate tax return—do not attach it to Form 706.
Where to File: Send Form 8971 and copies of all Schedules A to the IRS at: Internal Revenue Service, Attn: Mail Stop 824G, 7940 Kentucky Drive, Florence, KY 41042. Use U.S. mail, private delivery services (like FedEx or UPS specified options), or in-person delivery.
Additionally, furnish a copy of Schedule A (but not Form 8971) to each beneficiary by the same deadline. Delivery methods include email, mail, or private service to the beneficiary’s last known address. Keep proof of delivery, such as certified mail receipts.
For updates as of 2026, confirm the filing address on the IRS website, as minor changes may occur.
Key Components of IRS Form 8971
Form 8971 is structured into two main parts, with Schedule A as a required attachment.
Part I: Decedent and Executor Information
This section captures basic details:
- Decedent’s name, date of death, and SSN.
- Executor’s name, phone, TIN, and address (including foreign addresses).
- Checkbox for multiple executors (attach a list if applicable).
- Alternate valuation date if elected on the estate tax return.
Part II: Beneficiary Information
Here, report totals and details for each beneficiary:
- Number of beneficiaries, those with only excepted property (acquired or expected), and Schedules A filed.
- Checkbox if all assets will be sold before distribution.
- For each beneficiary: Name, TIN, address, date Schedule A was provided, and total estate tax value.
- Totals must match the sum from all attached Schedules A.
Round all values to the nearest whole dollar.
Schedule A: Beneficiary-Specific Reporting
Schedule A is furnished to beneficiaries and attached to Form 8971 for IRS submission. It details:
- Property description (matching Form 706), interest acquired, whether it generated estate tax, valuation date, and estate tax value.
- Required for non-excepted property (e.g., real estate, stocks) acquired by the filing due date.
- Optional for property expected to be acquired later.
Excepted property (e.g., cash, IRAs, life insurance proceeds) doesn’t require reporting.
Supplemental Filings for IRS Form 8971
If new information arises after the initial filing—such as a change in beneficiaries, property values, or additional distributions—file a supplemental Form 8971 and updated Schedules A. Check the “supplemental filing” box and report only changes. Due dates vary:
- For post-due-date acquisitions: January 31 of the following year.
- For value changes or final determinations: 30 days after the information becomes available.
The filing obligation continues until the final value is determined or all property is distributed.
Penalties for Non-Compliance
Failing to file Form 8971 timely, completely, or accurately can result in penalties under IRC Sections 6721 and 6722. These are inflation-adjusted and can be per-form or per-schedule, with higher amounts for intentional disregard. Beneficiaries face accuracy-related penalties (20% or 40%) for inconsistent basis reporting.
Reasonable cause exceptions may apply if delays were beyond your control, and de minimis errors (e.g., small dollar discrepancies) might be forgiven.
Final Thoughts on IRS Form 8971
Navigating IRS Form 8971 ensures proper estate administration and helps beneficiaries avoid tax pitfalls. Always consult a tax professional for personalized advice, as estate laws can be intricate. For the most current guidance, visit the IRS website or download the instructions at https://www.irs.gov/pub/irs-pdf/i8971.pdf. By staying informed, you can handle estate distributions efficiently and compliantly.