IRS Form 8971 (Schedule A) – Inheriting property from a loved one can be a complex process, especially when it comes to tax implications. One key aspect is ensuring accurate reporting of the property’s basis for tax purposes. That’s where IRS Form 8971 and its accompanying Schedule A come into play. This form helps executors report the estate tax value of inherited assets to both the IRS and beneficiaries, promoting consistency in basis reporting under Internal Revenue Code (IRC) section 1014(f). In this comprehensive guide, we’ll break down everything you need to know about IRS Form 8971 Schedule A, including its purpose, filing requirements, and recent updates as of 2026.
What Is IRS Form 8971?
IRS Form 8971, titled “Information Regarding Beneficiaries Acquiring Property From a Decedent,” is a reporting tool used by estate executors to disclose the final estate tax values of property distributed from an estate. It must be filed separately from other tax returns and includes copies of Schedule A for each beneficiary. The primary goal is to inform the IRS about beneficiaries who have acquired property and to provide those beneficiaries with basis information to avoid overstatement of basis on their own tax returns.
This form applies to estates where a federal estate tax return (Form 706 or Form 706-NA) is filed after July 2015. It ensures compliance with the consistent basis rule, which prevents beneficiaries from claiming a higher basis than the value reported on the estate tax return. Executors are required to file even if no Schedules A are needed at the time, such as when all property is excepted or not yet distributed.
Understanding Schedule A of Form 8971
Schedule A is the beneficiary-specific attachment to Form 8971. Each beneficiary receives their own Schedule A, which details the property they acquired from the decedent, including descriptions, percentages of interest, valuation dates, and estate tax values in U.S. dollars. This schedule informs beneficiaries of the property’s value for basis reporting purposes, particularly if the asset increased the estate’s tax liability.
Key fields on Schedule A include:
- Decedent and executor information (names, SSNs/TINs, addresses).
- Property details: Item numbers from Form 706/706-NA, descriptions, percentage of interest acquired, whether the asset increased estate tax liability (Yes/No), valuation date, and estate tax value.
- A notice to beneficiaries explaining the importance of retaining the schedule for tax reporting and referencing IRC sections 1014(a) and 1014(e) for basis determination.
The total estate tax value of the property is calculated by summing the values in column (h), with provisions for additional pages if needed. Schedule A must be furnished directly to beneficiaries via mail, email, or in person, but not attached to Form 8971 when provided to them to protect privacy.
Who Needs to File IRS Form 8971?
The filing obligation falls on the executor of the estate (or personal representative/administrator). If no executor is appointed, it extends to any person in possession of the decedent’s property. Multiple executors may file for the same estate, each reporting on the property they handle.
Form 8971 is required only if:
- A Form 706 (United States Estate and Generation-Skipping Transfer Tax Return) or Form 706-NA (for nonresident aliens) is filed after July 2015.
- The gross estate plus adjusted taxable gifts exceeds the basic exclusion amount for the year of death (e.g., inflation-adjusted amounts apply; for 2025 and beyond, check annual IRS updates).
Exceptions include estates filing Form 706 solely for generation-skipping transfer tax elections, portability of the deceased spousal unused exclusion (DSUE), or protective filings. No filing is needed for other estate-related forms like 706-QDT or 706-CE.
Beneficiaries identified on the form include individuals, trusts, or estates acquiring non-excepted property. Excepted property includes cash in U.S. dollars, certain life insurance proceeds, household items not requiring appraisal, and assets sold before distribution with gain recognition.
Filing Deadlines and Procedures for Form 8971
Form 8971 and attached Schedules A must be filed with the IRS no later than 30 days after the earlier of:
- The due date of Form 706 or 706-NA (including extensions).
- The actual filing date of Form 706 or 706-NA.
If the deadline falls on a weekend or holiday, file on the next business day. Mail the form to: Internal Revenue Service, Mail Stop 824G, 7940 Kentucky Drive, Florence, KY 41042. Private delivery services like UPS, DHL, or FedEx can be used if they meet IRS-designated criteria.
Schedules A must be furnished to beneficiaries by the same deadline. Proof of delivery (e.g., certified mail receipts) should be retained. For trusts or estates with multiple trustees/executors, providing to one is sufficient.
Values are reported in whole dollars, rounded appropriately. If an alternate valuation date was elected on Form 706, note it on Form 8971.
How to Complete Schedule A: Step-by-Step?
Completing Schedule A requires information from Form 706/706-NA. Here’s a simplified guide:
- Part I: General Information – Enter decedent’s name and SSN, beneficiary’s name and TIN, executor’s details, and address. Check boxes for supplemental filings or changes.
- Part II: Information on Property Acquired – List each property item:
- Columns (a)-(d): Item numbers, schedules from Form 706, and descriptions.
- Column (e): Percentage of interest (e.g., 100% for full ownership, 50% for undivided interest).
- Column (f): Indicate if the asset increased estate tax liability.
- Column (g): Valuation date (date of death or alternate).
- Column (h): Estate tax value (full fair market value, undiminished by debts).
- Totals – Sum column (h) values, including any from attached additional pages.
If beneficiary TINs are unavailable, note “requested” and supplement later. For foreign beneficiaries without TINs, attach a statement explaining exemption.
Supplemental Filings for Form 8971 and Schedule A
Executors must file supplements if:
- New property is acquired by a beneficiary.
- Information changes (e.g., beneficiary details, property values due to IRS audits or court determinations).
Check the “Supplemental Filing” box and report only changes. Due dates vary: January 31 of the following year for post-due-date acquisitions, or 30 days after changes become known. The duty to supplement continues until all property values are final and distributed.
Penalties for Non-Compliance
Failure to file or furnish accurate Form 8971 and Schedules A can result in penalties under IRC sections 6721 and 6722. These include:
- Up to inflation-adjusted amounts per form/schedule for untimely or incorrect filings (e.g., $290 per failure in 2025, subject to updates).
- Safe harbors for de minimis errors (≤$100) and reasonable cause exceptions.
Beneficiaries face a 20% accuracy-related penalty (or 40% for gross misstatements) if they report an inconsistent basis.
Recent Updates to IRS Form 8971 Schedule A (As of 2026)
The instructions for Form 8971 and Schedule A were last revised in August 2025, with no major structural changes noted in early 2026. Key developments include:
- AICPA recommendations in May 2025 for clarifying instructions on beneficiary reporting and excepted property.
- Inflation adjustments for penalties and exclusion amounts in Rev. Proc. 2024-40.
- Final regulations (T.D. 9991) effective September 2024, clarifying that reporting applies only to “acquired” property and refining excepted property definitions.
Always check IRS.gov for the latest revisions, as forms are updated annually.
Frequently Asked Questions About IRS Form 8971 Schedule A
What if a beneficiary can’t be located?
Attach a statement detailing efforts to locate them and note “not furnished” on Form 8971.
Does Form 8971 apply to small estates?
No, only if the estate exceeds the basic exclusion amount and files Form 706/706-NA.
Can I e-file Form 8971?
As of 2026, it’s paper-filed only, though related forms like Form 709 may support e-filing.
What is the basis of inherited property?
Generally the fair market value at death (step-up basis), but consistent with Schedule A values.
Conclusion
Navigating IRS Form 8971 and Schedule A is crucial for executors to avoid penalties and ensure beneficiaries report accurate bases on inherited property. By understanding these requirements, you can streamline the estate settlement process. For the official Schedule A PDF, download it here: https://www.irs.gov/pub/irs-pdf/f8971sa.pdf. Consult a tax professional for personalized advice, as estate tax rules can be intricate.