Form 8971 (Instructions)

Instructions for Form 8971
and Schedule A

Department of the Treasury
Internal Revenue Service

(Rev. September 2016)

Information Regarding Beneficiaries Acquiring Property From a Decedent
(For use with Form 8971 (Rev. January 2016))
Section references are to the Internal
Revenue Code unless otherwise noted.

Future Developments

For the latest information about
developments related to Form 8971 and
its instructions, such as legislation
enacted after they were published, go to
www.irs.gov/form8971.

General Instructions
Purpose of Form

The Surface Transportation and Veterans
Health Care Choice Improvement Act of
2015 requires executors of an estate and
other persons who are required to file
Form 706, United States Estate (and
Generation-Skipping Transfer) Tax Return
or Form 706-NA, United States Estate
(and Generation-Skipping Transfer) Tax
Return Estate of nonresident not a citizen
of the United States, to report the final
estate tax value of property distributed or
to be distributed from the estate, if the
estate tax return is filed after July 2015.
Form 8971, along with a copy of every
Schedule A, is used to report values to the
IRS. One Schedule A is provided to each
beneficiary receiving property from an
estate.
Provide each beneficiary only with
a copy of that beneficiary’s own
CAUTION Schedule A. Do not provide a
copy of the Form 8971 with or without
attached Schedule(s) A to any beneficiary.

!

Certain property received by a
beneficiary may be subject to a
consistency requirement, meaning that the
beneficiary can’t use a value higher than
the value reported on Schedule A as the
beneficiary’s initial basis in the property.

Who Must File

An executor of an estate or other
person(s) required to file Form 706 or
Form 706-NA under sections 6018(a) and
6018(b), if the return is filed after July
2015, and whether or not that form is filed
timely, is required to file Form 8971 with
attached Schedule(s) A with the IRS and
to provide each beneficiary listed on the
Form 8971 with that beneficiary’s
Schedule A. See the Instructions for Form
706 or Form 706-NA, for more information
on the filing requirement for those forms.
Oct 04, 2016

Form 8971 isn’t required when:
The gross estate plus adjusted taxable
gifts is less than the basic exclusion
amount;
Estate tax-related forms (for example,
Forms 706-QDT, 706-CE, and 706-GS(D),
other than those mentioned above are
filed;
The estate tax return is filed solely to
make an allocation or election respecting
the generation-skipping transfer tax; or
The estate tax return is filed solely to
elect portability of the deceased spousal
exclusion amount (DSUE).

When To File

Form 8971 (including all attached
Schedule(s) A) must be filed with the IRS
and only the Schedule A is to be provided
to the beneficiary listed on that
Schedule A, no later than the earlier of:
The date that is 30 days after the date
on which Form 706 or Form 706-NA is
required to be filed (including extensions)
with the IRS; or
The date that is 30 days after the date
Form 706 or Form 706-NA is filed with the
IRS.
If the first Form 706 or Form 706-NA is
filed both after the form’s due date
(including extensions) and after July 2015,
the Form 8971 and Schedule(s) A are due
30 days after the filing date.
Form 8971 is a separate filing
requirement from the estate’s Form 706 or
706-NA, and shouldn't be attached to the
respective estate tax return. Form 8971
and attached Schedule(s) A must be filed
with the IRS, separate from any and all
other tax returns filed by the estate.
Note. Notice 2016-27, 2016-15 I.R.B.
576, available at www.irs.gov/irb/
2016-15_IRB/index.html, made June 30,
2016, the due date for:
All Forms 8971 (including the attached
Schedule(s) A) required to be filed with the
IRS after July 31, 2015, and before June
30, 2016; and
All Schedules A required to be provided
to beneficiaries after July 31, 2015, and
before June 30, 2016.
Note. If the due date falls on a Saturday,
Sunday, or legal holiday, the executor of
an estate or other person(s) may file on
the next business day.

Cat. No. 68440S

Where To File

File Form 8971 (including all Schedule(s)
A) at the following address.
Department of the Treasury
Internal Revenue Service Center
Mail Stop #824G
Cincinnati, OH 45999
A beneficiary can be provided
Schedule A:
In person to an individual beneficiary, to
the trustee(s) of a beneficiary trust, or to
the executor(s) of a beneficiary estate;
By email;
By U.S. mail to the beneficiary’s last
known address; or
By private delivery service to the
beneficiary’s last known address (see
below).
The executor of the estate (or other
person required to file) must certify on
Form 8971, Part II, column D, the date on
which Schedule A was provided to each
beneficiary and should keep proof of
mailing, proof of delivery,
acknowledgment of receipt, or other
information relevant for the estate’s
records. In cases where a trust or another
estate is a beneficiary and has multiple
trustees or executors, providing
Schedule A to one trustee or executor is
enough to meet the requirement.
Private delivery services. Certain
private delivery services designated by the
IRS may be used to meet the “timely
mailing as timely filing” rule for tax returns.
These private delivery services include
only the following.
DHL Express 9:00, DHL Express 10:30,
DHL Express 12:00, DHL Express
Worldwide, DHL Express Envelope, DHL
Import Express 10:30, DHL Import
Express 12:00, and DHL Import Express
Worldwide.
Federal Express (FedEx): FedEx
Priority Overnight, FedEx Standard
Overnight, FedEx 2Day, FedEx
International Priority, FedEx International
First, FedEx First Overnight, FedEx
International Next Flight Out, and FedEx
International Economy.
United Parcel Service (UPS): UPS Next
Day Air, UPS Next Day Air Saver, UPS
2nd Day Air, UPS 2nd Day Air A.M., UPS
Worldwide Express Plus, UPS Worldwide
Express, and UPS Next Day Air Early AM.

For the IRS mailing address to use if
you are using a private delivery service, go
to IRS.gov and enter “private delivery
service” in the search box.
The private delivery service can tell you
how to get written proof of the mailing
date.

Supplemental Forms 8971
and Schedules A

The value of the property to be reported
on the initial Form 8971 and the attached
Schedules A is the fair market value of the
asset as reported on the estate tax return.
However, the final value for purposes of
the federal estate tax may differ from that
reported on the estate tax return. A value
is considered “final” when:
The value of the property shown on an
estate tax return filed with the IRS isn't
contested by the IRS before the period of
assessment expires;
The value of the property is specified by
the IRS and isn't timely contested by the
estate (or other person required to file
under section 6018(b)); or
The value of the property is determined
by a court or pursuant to a settlement
agreement with the IRS, including the
resolution of a claim for abatement or
refund.
If information reported on Form 8971
and the Schedule(s) A filed with the IRS or
provided to a beneficiary differs from the
final value (as the result of the resolution
of a valuation dispute or otherwise), the
executor or other person required to make
this filing must file a supplemental Form
8971 and affected Schedule(s) A with the
IRS and provide an updated supplemental
Schedule A to each affected beneficiary
no later than 30 days after the adjustment.
See Where To File, earlier. On both the
supplemental Form 8971 and each
supplemental Schedule A, the
“Supplemental Filing” box should be
checked and only the information that has
changed should be reported.
If the initial Form 8971 and Schedule(s)
A identify several beneficiaries who might
receive the same property, the estate
may, but isn’t required to, file a
supplemental Form 8971 and Schedule(s)
A to specify the actual distribution of that
property among the identified
beneficiaries.
If the executor or other person required
to file Form 8971 has been notified that a
Form 706 or Form 706-NA, related to the
Form 8971 and Schedule(s) A has been
selected for examination, a copy of the
supplemental Form 8971 with attached
supplemental Schedule(s) A should be
provided to the office conducting the
examination.

Rounding Off to Whole
Dollars

you were in existence, if shorter) ending
before the calendar year in which the
information returns were due are $5 million
or less.

The value of property should be reported
in U.S. dollars and rounded to
whole-dollar amounts. To round, drop
amounts under 50 cents and increase
amounts from 50 to 99 cents to the next
dollar. For example, $1.39 becomes $1
and $2.55 becomes $3. If you add two or
more amounts to figure an item's value,
include the cents when adding the
amounts and round off only the total.

Intentional disregard of filing require­
ments. If any failure to file a correct Form
8971 or Schedule A is due to intentional
disregard of the requirements to file a
correct Form 8971 and Schedule(s) A, the
minimum penalty is at least $530 per Form
8971 and the Schedule(s) A required to be
filed with it, with no maximum penalty.

Penalties

Note. An executor may be subject to
penalties for failure to file and/or furnish
correct Forms 8971 and Schedule(s) A
even if there was no tax due on the estate
tax return.
Failure to file correct Forms 8971 by
the due date (section 6721). If the
executor of an estate or other person
required to file Form 8971 fails to file a
correct Form 8971 and/or Schedule A with
the IRS by the due date and reasonable
cause isn't shown, a penalty may be
imposed. The penalty applies if there is a
failure to file timely, a failure to include all
information required to be shown on the
form or schedule, a failure to include
correct information on the form or
schedule, or a failure to file a correct
supplemental Form 8971 and/or
Schedule A by the due date. A complete
Form 8971 includes all Schedule(s) A.
Only one penalty will apply for all
failures relating to a single filing of a single
Form 8971 and the Schedule(s) A
required to be filed along with it. Each
filing of a Form 8971 with Schedule(s) A is
a separate filing, regardless as to whether
the filing is of the initial Form 8971 and
Schedule(s) A or a supplemental Form
8971 and Schedule(s) A.
The amount of the penalty depends on
when the correct Form 8971 with
Schedule(s) A is filed.
The penalty is as follows.
$50 per Form 8971 (including all
Schedule(s) A) if it is filed within 30 days
after the due date. The maximum penalty
is $532,000 per year (or $186,000 if the
taxpayer qualifies for lower maximum
penalties, as described below).
$260 per Form 8971 (including all
Schedule(s) A) if it is filed more than 30
days after the due date or if it isn't filed.
The maximum penalty is $3,193,000 per
year ($1,064,000 if the taxpayer qualifies
for lower maximum penalties, as
described below).
All penalty amounts shown are subject
to adjustment for inflation.
Lower maximum penalties. You qualify
for lower maximum penalties if your
average annual gross receipts for the 3
most recent tax years (or for the period
­2­

Inconsequential error or omission. An
inconsequential error or omission isn't
considered a failure to include correct
information. An inconsequential error or
omission doesn't prevent or hinder the IRS
from processing the Form 8971 and the
Schedule(s) A required to be filed along
with it. Errors and omissions that are
never inconsequential are those related to
a TIN, a beneficiary's surname, and the
value of the asset the beneficiary is
receiving from the estate.
Note. A TIN is a Social Security Number
(SSN), an Employer Identification Number
(EIN), an Individual Taxpayer Identification
Number (ITIN), or any other number used
by the IRS in the administration of tax
laws. See Part II—Beneficiary Information,
later, for information on obtaining the TIN
of a beneficiary of the estate.
Failure to furnish correct Schedules A
to beneficiaries by the due date (sec­
tion 6722). If the executor of an estate or
other person required to file Form 8971
fails to provide a correct Schedule A to a
beneficiary and doesn't show reasonable
cause, a penalty may be imposed. The
penalty applies if there is a failure to
provide the Schedule A by the due date, a
failure to include all information required to
be shown on the schedule, a failure to
include correct information on the
schedule, or a failure to provide a correct
supplemental Schedule A by the due date.
The penalty applies for each Schedule A
required to be provided.
The amount of the penalty depends on
when a correct Schedule A is provided.
The penalty is as follows.
$50 per Schedule A if it is provided
within 30 days after the due date. The
maximum penalty is $532,000 per year (or
$186,000 if the taxpayer qualifies for lower
maximum penalties, as described below).
$260 per Schedule A if it is provided
more than 30 days after the due date or if
it isn't provided. The maximum penalty is
$3,193,000 per year ($1,064,000 if the
taxpayer qualifies for lower maximum
penalties, as described below).
All penalty amounts shown are subject
to adjustment for inflation.
Lower maximum penalties. You qualify
for lower maximum penalties if your
average annual gross receipts for the 3

Instructions for Form 8971 and Schedule A

most recent tax years (or for the period
you were in existence, if shorter) ending
before the calendar year in which the
information returns were due are $5 million
or less.
Intentional disregard of filing require­
ments. If any failure to provide a correct
Schedule A is due to intentional disregard
of the requirements to provide correct
Schedules A, the penalty is at least $530
per Schedule A with no maximum penalty.
Inconsequential error or omission. An
inconsequential error or omission isn't
considered a failure to include correct
information. An inconsequential error or
omission can’t reasonably be expected to
prevent or hinder the beneficiary from
timely receiving correct information and
using the information to report basis on the
beneficiary’s own return. Errors and
omissions that are never inconsequential
are those related to (a) the value of the
asset the beneficiary is receiving from the
estate, and (b) a significant item in a
beneficiary's address.
Reasonable cause exception to the
penalties for failing to file Forms 8971
and Schedules A and for failing to pro­
vide Schedules A to beneficiaries. The
penalties for failing to file correct Form
8971 and Schedules A with the IRS and
for failing to provide correct Schedules A
to beneficiaries won't apply to any failure
that is shown to be due to reasonable
cause and not to willful neglect. In general,
it must be shown that the failure was due
to an event beyond the taxpayer’s control
or due to significant mitigating factors. It
must also be shown that the executor or
other person required to file acted in a
responsible manner and took steps to
avoid the failure.

Penalties for Inconsistent
Filing

Beneficiaries who report basis in property
that is inconsistent with the amount on the
Schedule A may be liable for a 20%
accuracy-related penalty under section
6662.

Obtaining Forms and
Publications To File or Use

You can access the IRS website 24 hours
a day, 7 days a week, at IRS.gov to:
Download forms, instructions, and
publications;
Order IRS products;
Research tax questions;
Search publications by topic or
keyword; and
Sign up to receive local and national tax
news by email.

Specific Instructions

Complete Form 8971 and each attached
Schedule A in its entirety. A form or

schedule filed with the IRS without entries
in each field won't be processed. A form
with an answer of “unknown” won't be
considered a complete return.

Part I — Decedent and
Executor Information
Line 3. Enter the SSN of the decedent. If
the decedent didn't have an SSN, the
executor (or other person required to file
Form 706) should obtain one for the
decedent by filing Form SS-5, Application
for a Social Security Card. You can get
Form SS-5 online at
www.socialsecurity.gov or by calling the
SSA at 1-800-772-1213.
Line 4. If there is more than one executor,
enter the name of one executor and see
the instructions for line 8.
Line 6. Provide only the TIN of the
executor listed on line 4 and see the
instructions for line 8.
Line 7. Provide only the address of the
executor listed on line 4. Use Form 8822,
Change of Address, to report a change of
the executor’s address. Also, see the
instructions for line 8.
Line 8. Check the box and attach a
statement with the name, address,
telephone number, and TIN of each
executor (if any) other than the one named
on line 4.
Line 9. If the executor made an election
on the estate tax return to use alternate
valuation under section 2032, provide the
alternate valuation date.

Part II — Beneficiary
Information

A beneficiary is an individual, trust, or
other estate who has acquired (or is
expected to acquire) property from the
estate. If the executor is also a beneficiary
who has acquired (or is expected to
acquire) property from the estate, the
executor is a beneficiary for purposes of
the Form 8971 and Schedule A.

Column A. Enter the name of each
individual, trust, or other estate that
acquired (or is expected to acquire)
property from the estate. Retain a copy of
the Form 8971 (including all attached
Schedule(s) A) for the estate’s records.
Column B. Enter the TIN of each
beneficiary listed. If the executor of the
estate solicited a beneficiary's TIN in
writing and hasn’t received it, enter
“requested” and attach a copy of the
solicitation to Form 8971 to avoid inquiries
from the IRS. A supplemental Form 8971
and corresponding Schedule A must be
filed with the IRS once the TIN has been
obtained.

Instructions for Form 8971 and Schedule A

­3­

Note. Some foreign beneficiaries may not
be required to provide a TIN to the estate.
If the foreign beneficiary isn’t required to
provide a TIN, enter “Not Required” in the
TIN entry space.
Column D. For each beneficiary, enter
the date on which the executor gave
Schedule A to the beneficiary. See Where
To File, earlier.
Return preparer. Permission to discuss
the Form 8971 is limited to the information
reported on (or required to be reported on)
the Form 8971 and attached Schedule(s)
A and doesn't authorize the return
preparer to represent the estate before the
IRS or to enter into any agreements with
the IRS regarding the Form 8971 and
attached Schedule(s) A.
Complete and attach Form 2848,
Power of Attorney and Declaration of
Representative, if the executor would like
the return preparer to represent the estate
before the IRS with respect to the Form
8971 and Schedule(s) A or any other
matter related to the estate. Completing
Form 2848 may authorize the person
designated on that form to sign
agreements, consents, waivers, or other
documents.
Note. When completing Form 2848,
remember the executor, not the estate, is
the “taxpayer” to be listed in line 1, and the
TIN listed should also be the executor's
TIN. Also, when filling out line 3, enter
“Civil Penalties” in the Description of the
Matter column, “Form 8971/Schedule A” in
the Tax Form Number column, and the
decedent's date of death using the
four-digit year and two-digit month as
“YYYYMM” in the Year(s) or Period(s)
column.
Anyone who is paid to prepare the
Form 8971 and/or any Schedule A must
sign the form as a paid preparer and give
a copy of the completed Form 8971 and/or
Schedule(s) A to the executor required to
file Form 706 or Form 706-NA.
Note. A paid preparer may sign original or
amended returns by rubber stamp,
mechanical device, or computer software
program.

Signature and Verification

All executors shown on Form 8971 and
listed on any attached statement are
responsible for the reporting requirements
related to Form 8971 and Schedule(s) A.
However, it is enough for only one of the
executors to sign Form 8971.
Form 8971 is signed under penalties of
perjury and all executors are responsible
for the information included on Form 8971
and Schedule(s) A as filed with the IRS
and Schedules A provided to
beneficiaries. All executors are also liable
for all applicable penalties.

Schedule A — Information
Regarding Beneficiaries
Acquiring Property From a
Decedent

Executors of estates filing Form 8971 are
required to complete a Schedule A for
each beneficiary that acquired (or is
expected to acquire) property from the
estate. You will need a copy of the Form
706 or Form 706-NA filed by the estate of
the decedent to complete this schedule.
All property acquired (or expected to be
acquired) by a beneficiary must be listed
on that beneficiary’s Schedule A. If the
executor hasn't determined which
beneficiary is to receive an item of
property as of the due date of the Form
8971 and Schedule(s) A, the executor
must list all items of property that could be
used, in whole or in part, to fund the
beneficiary’s distribution on that
beneficiary’s Schedule A. (This means
that the same property may be reflected
on more than one Schedule A.) A
supplemental Form 8971 and
corresponding Schedule(s) A may, but
aren’t required to, be filed once the
distribution to each such beneficiary has
been made.
Note. A cash bequest acquired (or
expected to be acquired) by a beneficiary
isn’t considered reportable property for
purposes of Form 8971/Schedule A.
Use and duplicate page A-2
(Schedule A—Continuation Sheet) if
additional space is needed to list the
property acquired (or expected to be
acquired) by a beneficiary. Attach a copy
of each completed Schedule A to Form
8971 and submit to the IRS. Provide a
copy of each Schedule A only to the
beneficiary named on that Schedule A. Do
not provide a copy of the Form 8971 to a
beneficiary. See the instructions under
Where To File, earlier.
Column A. Number the items received by
the beneficiary. Continue this numbering
on page A-2 of the
Schedule A—Continuation Sheet (if
necessary).
Column B. Use the same description in
column B that the executor used for the
property on the Form 706 or Form
706-NA. Include in column B the schedule
and item number where the property was
reported on Form 706 or Form 706-NA, as
applicable.
If the beneficiary acquired (or is
expected to acquire) a joint interest,
fractional interest, or any other interest in
property which is less than 100% of the
interest reported on the estate tax return,
indicate the interest in the property the
beneficiary will acquire.
Listings of bulk assets may be attached
to Schedule A in lieu of a detailed

description of each item that has been
acquired (or is expected to be acquired)
by a beneficiary. The listing should consist
of a related property (for example, stocks
held in a single brokerage account) and
only include information relevant to basis
reporting such as name/description of the
property, value, and valuation date. Do not
attach property appraisals to Schedule A.
For more information on details to be
included by asset type or schedule, see
the Instructions for Form 706 or Form
706-NA.
Column C. An entry (Y or N) is required
in this column for each asset. Indicate “Y”
only if estate tax was generated and the
asset contributed to the estate tax (for
example, the asset wasn't subject to a
marital or charitable deduction).
Generally, any property that qualifies
for a marital deduction under section 2056
or 2056A or a charitable deduction under
section 2055 won't generate estate tax
and “N” should be indicated.
Column D. Generally, the valuation date
of property will be the decedent’s date of
death. If the estate elected to use an
alternate valuation date, list the value of
the property on the alternate valuation
date. See section 2032 for additional
guidance.
Column E. List the value reported on
Form 706 or Form 706-NA. The value
reported in column E should be the fair
market value as of the decedent's date of
death or any alternate valuation date used
for the estate tax return. This value
shouldn’t reflect any post-death
adjustment in value. The full fair market
value of the property acquired (or
expected to be acquired) by the
beneficiary is to be reported in column E.
This value shouldn’t factor in mortgages,
non-recourse indebtedness, or other
decreases in equity.
For partial interests of property,
(including life estates and usufructs) the
value reported should reflect the
proportional value of the partial interest for
each beneficiary. For example, an estate
has property valued on the Form 706 at
$400,000. The property is being
distributed to Beneficiary 1, receiving a
75% interest in the property, and
Beneficiary 2, receiving a 25% interest in
the property. Schedule A, Part II, column E
should reflect $300,000 on the Schedule A
for Beneficiary 1 and $100,000 on the
Schedule A for Beneficiary 2. If the value
reported on a Schedule A that has already
been filed with the IRS or provided to a
beneficiary changes (as a result of the
resolution of a valuation issue or
otherwise), you must file a supplemental
Form 8971 and associated Schedule(s) A
with the IRS and provide an updated
Schedule A to each affected beneficiary
no later than 30 days after the adjustment.
­4­

Privacy Act and Paperwork Reduction
Act Notice. We ask for the information on
this form to carry out the Internal Revenue
laws of the United States. You are
required to give us the information. We
need it to ensure that you are complying
with these laws and to allow us to figure
and collect the right amount of tax.
Sections 6035 and 6109, and the
regulations require you to provide this
information.
You aren’t required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records relating
to a form or its instructions must be
retained as long as their contents may
become material in the administration of
any Internal Revenue law. Generally, tax
returns and return information are
confidential, as required by section 6103.
However, section 6103 allows or requires
the Internal Revenue Service to disclose
information from this form in certain
circumstances. For example, we may
disclose information to the Department of
Justice for civil or criminal litigation, and to
cities, states, the District of Columbia, and
U.S. commonwealths or possessions for
use in administering their tax laws. We
may also disclose this information to other
countries under a tax treaty, to federal and
state agencies to enforce federal non-tax
criminal laws, or to federal law
enforcement and intelligence agencies to
combat terrorism. Failure to provide this
information, or providing false information,
may subject you to penalties.
The time needed to complete and file
this form and related schedules will vary
depending on individual circumstances.
The estimated average time is:
Recordkeeping . . . . . . . .
Learning about the law or the
form . . . . . . . . . . . . . . .
Preparing, copying,
assembling, and sending the
form to the IRS . . . . . . . .

3 hr., 49 min.
42 min.

47 min.

If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form simpler,
we would be happy to hear from you. You
can send us comments from www.irs.gov/
formspubs/. Click on “More Information”
and then on “Give us feedback.” You can
also send your comments to the Internal
Revenue Service, Tax Forms and
Publications Division, 1111 Constitution
Ave. NW, IR-6526, Washington, DC
20224. Do not send the tax form to this
address. Instead, see Where To File,
earlier.

Instructions for Form 8971 and Schedule A