IRS FINALLY ISSUES GUIDANCE FOR TAXPAYERS DECEASED IN 2010

TAX BRIEF

October 2011
The Internal Revenue Service issued Notice 2011-76 on September 13, 2011 which extends the due date and provides penalty relief for the estates of decedents who passed away in 2010 and for their beneficiaries as well. These extended due dates allow the estate much needed additional time to consider options available under the estate tax provision enacted late last year. The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provides estates with an option to choose either paying estate tax based on the recently enacted estate tax provision that allows an election to use a modified carryover basis and pay no estate tax or receive a step up in basis for the properties. According to the notice, estates now have until January 17, 2012 to determine which option to choose. Penalty relief is also available to beneficiaries who inherited properties and sold them in 2010 and made a good faith estimate of their tax liability arising from the sale since they were unsure whether the estate would make a modified carryover basis election. In addition, an estate of a decedent who passed away in 2010 but before December 17, 2010 that extended its estate tax return will now have until March 2012 to file under the notice. For the estates of decedents who passed away after December 16, 2010 and before January 1, 2011, the due date is now 15 months after the date of death. As your tax and business advisors, we want to make sure that you are aware of the planning opportunities that are currently available. Please feel free to contact any of our tax professionals with any questions you have regarding these new tax provisions.

Thank you for your time and continued support of the Enterprise Zone program As always, please call if you would like to discuss any of these items further. Your Tax Partners, Mark G. Cook, Partner Steven J. Cupingood, Partner Todd Northrup, Partner Javier Ramirez, Partner

Richard A. Linder, Partner David Neighbors, Partner Don G. Leve, Partner Thomas E. Wendler, Partner

Jon Widdowson, Partner Michael Wu, Partner Dan B. Faulk, Partner

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matters addressed herein. Notice: Opinions, conclusions, and other information in this message are not intended to represent recommendations or advice to you or any other person. Each persons circumstances are unique, and we strongly suggest you discuss your specific situation with your professional advisor before taking any action based on the information herein or information to which this message refers.