For estates of individuals who died in 2010, executors have until January 17, 2012, to elect not to have estate tax apply and to have the beneficiary’s basis in property received from these 2010 decedents determined under the modified carryover basis rules in Sec. 1022. Effectively the beneficiary’s basis in property received will be the lower of:
1. The fair market value on the date of the decedent’s death; or
2. The adjusted basis of the property immediately before the death of the decedent, plus certain additions
Each estate will receive potential basis additions, including:
1. $1.3 million basis step-up;
2. $3 million addition to the surviving spouse
This election is made by filing Form 8939, Allocation of Increase in Basis of Property Acquired from a Decedent.
The estate and gift tax lifetime exclusion increases from $5 million to $5.12 million for 2012.
If you have any questions, please don’t hesitate to contact me.
Mike Agresti, CPA
Lesley, Thomas, Schwarz & Postma, Inc.