Glossary

Form 8971 – Information Regarding Beneficiaries Acquiring Property from a Decedent

Form 8971 reports inherited property’s fair market value to the IRS. Required when estate tax applies, it details beneficiary names, addresses, and property values. Filed by the executor within 30 days of the estate tax return due date (Form 706), it’s given to beneficiaries, not the IRS. Non-compliance leads to penalties and potential audits. Ensuring accurate reporting prevents tax evasion.

0:00 0:00

100

What is Form 8971 and Its Primary Purpose?

Form 8971, officially known as ‘Information Regarding Beneficiaries Acquiring Property from a Decedent,’ is a tax form used to report the final fair market value of inherited property to the IRS. It is required when the decedent’s estate is subject to estate tax and the property is inherited by one or more beneficiaries.

Key Features or Components

Form 8971 includes details such as the name of the estate, the names and addresses of beneficiaries, and the estate’s tax identification number. It also requires a description of each property interest transferred and its final fair market value as of the date of the decedent’s death.

Relevant Filing or Compliance Requirements

Form 8971 must be filed by the executor of the decedent’s estate within 30 days after the due date of the estate tax return (Form 706). The form is not filed with the IRS but must be provided to the beneficiaries who received the inherited property.

Penalties or Consequences for Non-Compliance

Failure to comply with the reporting requirements of Form 8971 can result in penalties imposed by the IRS. These penalties can include fines based on the value of the property transferred and may lead to extended audit scrutiny of the estate.

Importance in Tax Resolution or Financial Compliance

Form 8971 is essential for ensuring accurate reporting of inherited property transfers, which helps prevent tax evasion and ensures transparency in estate valuations. By complying with Form 8971 requirements, beneficiaries and executors can maintain proper tax compliance and avoid penalties.

Recommended for You

Abatement for Natural Disaster Relief

Natural disaster relief abatement provides tax reduction for entities impacted by natural calamities, ensuring financial stability post-disaster.

Fees for International Trade Compliance Deduction

The Fees for International Trade Compliance Deduction is a specific tax deduction that reduces taxable income from expenses related to adhering to international trade regulations.

Public EV Workforce Job Training Credit

The Public EV Workforce Job Training Credit is a tax incentive aimed at enhancing the workforce's skills in the electric vehicle (EV) sector, promoting economic growth and sustainability.

Real Estate Investment Trusts (REITs) and Tax Liens

Learn about Real Estate Investment Trusts (REITs) and tax liens, their benefits, risks, and their roles in financial planning and tax resolution.

Urban Energy Job Equity Credit

The Urban Energy Job Equity Credit incentivizes businesses to create sustainable energy jobs in urban areas, promoting economic growth and environmental stewardship.

Renewable Energy Workforce Job Expansion Credit

The Renewable Energy Workforce Job Expansion Credit is a tax credit that incentivizes the expansion of jobs in the renewable energy sector, promoting green growth and workforce development.

Form 8853 – Archer MSAs and Long-Term Care Insurance Contracts

Form 8853 is used to report tax information related to Archer Medical Savings Accounts (MSAs) and certain long-term care insurance contracts. This form helps determine deductions or income related to these specific healthcare-related financial tools.

Subscriptions to Professional Journals Deduction

The 'Subscriptions to Professional Journals Deduction' allows taxpayers to deduct expenses related to professional journal subscriptions, supporting continued education and industry-related learning.

Tax Sale Redemption Agreements

Tax Sale Redemption Agreements allow property owners to reclaim their assets post-tax sale by satisfying specific payment terms and conditions.

EV Public Housing Accessibility Credit

The EV Public Housing Accessibility Credit is designed to promote the installation of electric vehicle (EV) charging stations in public housing. This guide covers its purpose, main components, and the necessary compliance requirements for claiming this tax credit.

Form 6252 – Installment Sale Income

Form 6252 is an IRS tax form used to report profit from the sale of property when you receive payments over multiple years. If you're selling something and getting paid in installments, this form is likely for you.

CP102 Penalty for Incorrect Payments

The CP102 notice is issued by the IRS when a taxpayer makes an incorrect payment on their account, which may lead to penalties and the need for corrective action.

Mobile Payment Platform Fees Deduction

Mobile Payment Platform Fees Deduction involves understanding how fees from mobile payments impact taxable income and compliance for businesses and individuals.

Inclusive Economic Development Tax Credit

The Inclusive Economic Development Tax Credit supports projects that foster economic growth in underserved areas, encouraging investment through tax incentives.

CP504B Notice: Intent to Levy on State Tax Refund

The CP504B notice is a formal notification from the IRS that they intend to take your state tax refund to pay off overdue federal taxes. This notice means you need to take action to avoid losing your refund.

Form 8879 – IRS e-file Signature Authorization

Form 8879 is the IRS document that allows a tax professional to electronically file your tax return on your behalf, acting as your signature when you're not submitting the return directly. It’s a critical part of the e-filing process when you use a tax preparer.

Tools for Business Process Streamlining Deduction

Explore powerful tax tools designed for streamlining business processes and optimizing deduction management with comprehensive compliance strategies.

Subscription for Webinar Hosting Platforms Deduction

The Subscription for Webinar Hosting Platforms Deduction allows businesses to deduct expenses related to webinar services, directly impacting their taxable income.

Multi-Owner Property Tax Liens

Multi-Owner Property Tax Liens involve tax obligations on properties owned by multiple parties, impacting financial decisions and compliance requirements.

Tax Sale Eviction Process

The Tax Sale Eviction Process is a legal procedure initiated when property taxes remain unpaid, leading to the sale of a property and eventual eviction of occupants.