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                                                                                                     Department of the Treasury
Instructions for Form 8971                                                                           Internal Revenue Service

and Schedule A
(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       Form 8971 isn’t required when:               Where To File
Revenue Code unless otherwise noted.         The gross estate plus adjusted taxable       File Form 8971 (including all Schedule(s) 
                                             gifts is less than the basic exclusion       A) at the following address.
Future Developments                          amount;
For the latest information about             Estate tax-related forms (for example,       Department of the Treasury
developments related to Form 8971 and        Forms 706-QDT, 706-CE, and 706-GS(D),        Internal Revenue Service Center
its instructions, such as legislation        other than those mentioned above are         Mail Stop #824G
enacted after they were published, go to     filed;                                       Cincinnati, OH 45999
www.irs.gov/form8971.                        The estate tax return is filed solely to 
                                             make an allocation or election respecting 
                                             the generation-skipping transfer tax; or     A beneficiary can be provided 
General Instructions                         The estate tax return is filed solely to     Schedule A:
                                             elect portability of the deceased spousal    In person to an individual beneficiary, to 
Purpose of Form                              exclusion amount (DSUE).                     the trustee(s) of a beneficiary trust, or to 
                                                                                          the executor(s) of a beneficiary estate;
The Surface Transportation and Veterans                                                   By email;
Health Care Choice Improvement Act of        When To File                                 By U.S. mail to the beneficiary’s last 
2015 requires executors of an estate and     Form 8971 (including all attached            known address; or
other persons who are required to file       Schedule(s) A) must be filed with the IRS    By private delivery service to the 
Form 706, United States Estate (and          and only the Schedule A is to be provided    beneficiary’s last known address (see 
Generation-Skipping Transfer) Tax Return     to the beneficiary listed on that            below).
or Form 706-NA, United States Estate         Schedule A, no later than the earlier of:
(and Generation-Skipping Transfer) Tax       The date that is 30 days after the date      The executor of the estate (or other 
Return Estate of nonresident not a citizen   on which Form 706 or Form 706-NA is          person required to file) must certify on 
of the United States, to report the final    required to be filed (including extensions)  Form 8971, Part II, column D, the date on 
estate tax value of property distributed or  with the IRS; or                             which Schedule A was provided to each 
to be distributed from the estate, if the    The date that is 30 days after the date      beneficiary and should keep proof of 
estate tax return is filed after July 2015.  Form 706 or Form 706-NA is filed with the    mailing, proof of delivery, 
Form 8971, along with a copy of every        IRS.                                         acknowledgment of receipt, or other 
Schedule A, is used to report values to the                                               information relevant for the estate’s 
IRS. One Schedule A is provided to each      If the first Form 706 or Form 706-NA is      records. In cases where a trust or another 
beneficiary receiving property from an       filed both after the form’s due date         estate is a beneficiary and has multiple 
estate.                                      (including extensions) and after July 2015,  trustees or executors, providing 
                                             the Form 8971 and Schedule(s) A are due      Schedule A to one trustee or executor is 
        Provide each beneficiary only with   30 days after the filing date.               enough to meet the requirement.
!       a copy of that beneficiary’s own     Form 8971 is a separate filing               Private delivery services.  Certain 
CAUTION Schedule A. Do not provide a 
copy of the Form 8971 with or without        requirement from the estate’s Form 706 or    private delivery services designated by the 
attached Schedule(s) A to any beneficiary.   706-NA, and shouldn't be attached to the     IRS may be used to meet the “timely 
                                             respective estate tax return. Form 8971      mailing as timely filing” rule for tax returns. 
                                             and attached Schedule(s) A must be filed     These private delivery services include 
Certain property received by a               with the IRS, separate from any and all      only the following.
beneficiary may be subject to a              other tax returns filed by the estate.       DHL Express 9:00, DHL Express 10:30, 
consistency requirement, meaning that the                                                 DHL Express 12:00, DHL Express 
beneficiary can’t use a value higher than    Note.  Notice 2016-27, 2016-15 I.R.B.        Worldwide, DHL Express Envelope, DHL 
the value reported on Schedule A as the      576, available at www.irs.gov/irb/           Import Express 10:30, DHL Import 
beneficiary’s initial basis in the property. 2016-15_IRB/index.html, made June 30,        Express 12:00, and DHL Import Express 
                                             2016, the due date for:                      Worldwide.
Who Must File                                All Forms 8971 (including the attached       Federal Express (FedEx): FedEx 
An executor of an estate or other            Schedule(s) A) required to be filed with the Priority Overnight, FedEx Standard 
person(s) required to file Form 706 or       IRS after July 31, 2015, and before June     Overnight, FedEx 2Day, FedEx 
Form 706-NA under sections 6018(a) and       30, 2016; and                                International Priority, FedEx International 
6018(b), if the return is filed after July   All Schedules A required to be provided      First, FedEx First Overnight, FedEx 
2015, and whether or not that form is filed  to beneficiaries after July 31, 2015, and    International Next Flight Out, and FedEx 
timely, is required to file Form 8971 with   before June 30, 2016.                        International Economy.
attached Schedule(s) A with the IRS and                                                   United Parcel Service (UPS): UPS Next 
to provide each beneficiary listed on the    Note.  If the due date falls on a Saturday,  Day Air, UPS Next Day Air Saver, UPS 
Form 8971 with that beneficiary’s            Sunday, or legal holiday, the executor of    2nd Day Air, UPS 2nd Day Air A.M., UPS 
Schedule A. See the Instructions for Form    an estate or other person(s) may file on     Worldwide Express Plus, UPS Worldwide 
706 or Form 706-NA, for more information     the next business day.                       Express, and UPS Next Day Air Early AM.
on the filing requirement for those forms.

Oct 04, 2016                                        Cat. No. 68440S

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For the IRS mailing address to use if Rounding Off to Whole you were in existence, if shorter) ending
you are using a private delivery service, go before the calendar year in which the
to IRS.gov and enter “private delivery Dollars information returns were due are $5 million
service” in the search box. The value of property should be reported or less.
The private delivery service can tell you in U.S. dollars and rounded to
how to get written proof of the mailing whole-dollar amounts. To round, drop Intentional disregard of filing require
date. amounts under 50 cents and increase ments. If any failure to file a correct Form
amounts from 50 to 99 cents to the next 8971 or Schedule A is due to intentional
dollar. For example, $1.39 becomes $1 disregard of the requirements to file a
Supplemental Forms 8971 and $2.55 becomes $3. If you add two or correct Form 8971 and Schedule(s) A, the
and Schedules A more amounts to figure an item's value, minimum penalty is at least $530 per Form
The value of the property to be reported include the cents when adding the 8971 and the Schedule(s) A required to be
on the initial Form 8971 and the attached amounts and round off only the total. filed with it, with no maximum penalty.
Schedules A is the fair market value of the Inconsequential error or omission. An
asset as reported on the estate tax return. Penalties inconsequential error or omission isn't
However, the final value for purposes of Note. An executor may be subject to considered a failure to include correct
the federal estate tax may differ from that penalties for failure to file and/or furnish information. An inconsequential error or
reported on the estate tax return. A value correct Forms 8971 and Schedule(s) A omission doesn't prevent or hinder the IRS
is considered “final” when: even if there was no tax due on the estate from processing the Form 8971 and the
The value of the property shown on an tax return. Schedule(s) A required to be filed along
estate tax return filed with the IRS isn't with it. Errors and omissions that are
contested by the IRS before the period of Failure to file correct Forms 8971 by never inconsequential are those related to
assessment expires; the due date (section 6721). If the a TIN, a beneficiary's surname, and the
The value of the property is specified by executor of an estate or other person value of the asset the beneficiary is
the IRS and isn't timely contested by the required to file Form 8971 fails to file a receiving from the estate.
estate (or other person required to file correct Form 8971 and/or Schedule A with
under section 6018(b)); or the IRS by the due date and reasonable Note. A TIN is a Social Security Number
The value of the property is determined cause isn't shown, a penalty may be (SSN), an Employer Identification Number
by a court or pursuant to a settlement imposed. The penalty applies if there is a (EIN), an Individual Taxpayer Identification
agreement with the IRS, including the failure to file timely, a failure to include all Number (ITIN), or any other number used
resolution of a claim for abatement or information required to be shown on the by the IRS in the administration of tax
refund. form or schedule, a failure to include laws. See Part II—Beneficiary Information,
correct information on the form or later, for information on obtaining the TIN
If information reported on Form 8971 schedule, or a failure to file a correct of a beneficiary of the estate.
and the Schedule(s) A filed with the IRS or supplemental Form 8971 and/or
provided to a beneficiary differs from the Schedule A by the due date. A complete Failure to furnish correct Schedules A
final value (as the result of the resolution Form 8971 includes all Schedule(s) A. to beneficiaries by the due date (sec
tion 6722). If the executor of an estate or
of a valuation dispute or otherwise), the Only one penalty will apply for all other person required to file Form 8971
executor or other person required to make failures relating to a single filing of a single fails to provide a correct Schedule A to a
this filing must file a supplemental Form Form 8971 and the Schedule(s) A beneficiary and doesn't show reasonable
8971 and affected Schedule(s) A with the required to be filed along with it. Each cause, a penalty may be imposed. The
IRS and provide an updated supplemental filing of a Form 8971 with Schedule(s) A is penalty applies if there is a failure to
Schedule A to each affected beneficiary a separate filing, regardless as to whether provide the Schedule A by the due date, a
no later than 30 days after the adjustment. the filing is of the initial Form 8971 and failure to include all information required to
See Where To File, earlier. On both the Schedule(s) A or a supplemental Form be shown on the schedule, a failure to
supplemental Form 8971 and each 8971 and Schedule(s) A. include correct information on the
supplemental Schedule A, the
“Supplemental Filing” box should be The amount of the penalty depends on schedule, or a failure to provide a correct
checked and only the information that has when the correct Form 8971 with supplemental Schedule A by the due date.
changed should be reported. Schedule(s) A is filed. The penalty applies for each Schedule A
The penalty is as follows. required to be provided.
If the initial Form 8971 and Schedule(s) $50 per Form 8971 (including all The amount of the penalty depends on
A identify several beneficiaries who might Schedule(s) A) if it is filed within 30 days when a correct Schedule A is provided.
receive the same property, the estate after the due date. The maximum penalty The penalty is as follows.
may, but isn’t required to, file a is $532,000 per year (or $186,000 if the $50 per Schedule A if it is provided
supplemental Form 8971 and Schedule(s) taxpayer qualifies for lower maximum within 30 days after the due date. The
A to specify the actual distribution of that penalties, as described below). maximum penalty is $532,000 per year (or
property among the identified $260 per Form 8971 (including all $186,000 if the taxpayer qualifies for lower
beneficiaries. Schedule(s) A) if it is filed more than 30 maximum penalties, as described below).
If the executor or other person required days after the due date or if it isn't filed. $260 per Schedule A if it is provided
to file Form 8971 has been notified that a The maximum penalty is $3,193,000 per more than 30 days after the due date or if
Form 706 or Form 706-NA, related to the year ($1,064,000 if the taxpayer qualifies it isn't provided. The maximum penalty is
Form 8971 and Schedule(s) A has been for lower maximum penalties, as $3,193,000 per year ($1,064,000 if the
selected for examination, a copy of the described below). taxpayer qualifies for lower maximum
supplemental Form 8971 with attached All penalty amounts shown are subject penalties, as described below).
supplemental Schedule(s) A should be to adjustment for inflation. All penalty amounts shown are subject
provided to the office conducting the Lower maximum penalties. You qualify to adjustment for inflation.
examination. for lower maximum penalties if your Lower maximum penalties. You qualify
average annual gross receipts for the 3 for lower maximum penalties if your
most recent tax years (or for the period average annual gross receipts for the 3

2 Instructions for Form 8971 and Schedule A

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most recent tax years (or for the period schedule filed with the IRS without entries Note. Some foreign beneficiaries may not
you were in existence, if shorter) ending in each field won't be processed. A form be required to provide a TIN to the estate.
before the calendar year in which the with an answer of “unknown” won't be If the foreign beneficiary isn’t required to
information returns were due are $5 million considered a complete return. provide a TIN, enter “Not Required” in the
or less. TIN entry space.
Intentional disregard of filing require Part I — Decedent and Column D. For each beneficiary, enter
ments. If any failure to provide a correct Executor Information the date on which the executor gave
Schedule A is due to intentional disregard Schedule A to the beneficiary. See Where
of the requirements to provide correct Line 3. Enter the SSN of the decedent. If To File, earlier.
Schedules A, the penalty is at least $530 the decedent didn't have an SSN, the
per Schedule A with no maximum penalty. executor (or other person required to file Return preparer. Permission to discuss
Form 706) should obtain one for the the Form 8971 is limited to the information
Inconsequential error or omission. An decedent by filing Form SS-5, Application reported on (or required to be reported on)
inconsequential error or omission isn't for a Social Security Card. You can get the Form 8971 and attached Schedule(s)
considered a failure to include correct Form SS-5 online at A and doesn't authorize the return
information. An inconsequential error or www.socialsecurity.gov or by calling the preparer to represent the estate before the
omission can’t reasonably be expected to SSA at 1-800-772-1213. IRS or to enter into any agreements with
prevent or hinder the beneficiary from the IRS regarding the Form 8971 and
timely receiving correct information and Line 4. If there is more than one executor, attached Schedule(s) A.
using the information to report basis on the enter the name of one executor and see
beneficiary’s own return. Errors and the instructions for line 8. Complete and attach Form 2848,
Power of Attorney and Declaration of
omissions that are never inconsequential Line 6. Provide only the TIN of the Representative, if the executor would like
are those related to (a) the value of the executor listed on line 4 and see the the return preparer to represent the estate
asset the beneficiary is receiving from the instructions for line 8. before the IRS with respect to the Form
estate, and (b) a significant item in a 8971 and Schedule(s) A or any other
beneficiary's address. Line 7. Provide only the address of the
executor listed on line 4. Use Form 8822, matter related to the estate. Completing
Reasonable cause exception to the Change of Address, to report a change of Form 2848 may authorize the person
penalties for failing to file Forms 8971 the executor’s address. Also, see the designated on that form to sign
and Schedules A and for failing to pro instructions for line 8. agreements, consents, waivers, or other
vide Schedules A to beneficiaries. The documents.
penalties for failing to file correct Form Line 8. Check the box and attach a
8971 and Schedules A with the IRS and statement with the name, address, Note. When completing Form 2848,
for failing to provide correct Schedules A telephone number, and TIN of each remember the executor, not the estate, is
to beneficiaries won't apply to any failure executor (if any) other than the one named the “taxpayer” to be listed in line 1, and the
that is shown to be due to reasonable on line 4. TIN listed should also be the executor's
cause and not to willful neglect. In general, Line 9. If the executor made an election TIN. Also, when filling out line 3, enter
it must be shown that the failure was due on the estate tax return to use alternate “Civil Penalties” in the Description of the
to an event beyond the taxpayer’s control valuation under section 2032, provide the Matter column, “Form 8971/Schedule A” in
or due to significant mitigating factors. It alternate valuation date. the Tax Form Number column, and the
must also be shown that the executor or decedent's date of death using the
four-digit year and two-digit month as
other person required to file acted in a Part II — Beneficiary “YYYYMM” in the Year(s) or Period(s)
responsible manner and took steps to
avoid the failure. Information column.
A beneficiary is an individual, trust, or Anyone who is paid to prepare the
Penalties for Inconsistent other estate who has acquired (or is Form 8971 and/or any Schedule A must
expected to acquire) property from the sign the form as a paid preparer and give
Filing estate. If the executor is also a beneficiary a copy of the completed Form 8971 and/or
Beneficiaries who report basis in property who has acquired (or is expected to Schedule(s) A to the executor required to
that is inconsistent with the amount on the acquire) property from the estate, the file Form 706 or Form 706-NA.
Schedule A may be liable for a 20% executor is a beneficiary for purposes of
accuracy-related penalty under section the Form 8971 and Schedule A. Note. A paid preparer may sign original or
6662. amended returns by rubber stamp,
Column A. Enter the name of each
individual, trust, or other estate that mechanical device, or computer software
Obtaining Forms and acquired (or is expected to acquire) program.
Publications To File or Use property from the estate. Retain a copy of
You can access the IRS website 24 hours the Form 8971 (including all attached Signature and Verification
a day, 7 days a week, at IRS.gov to: Schedule(s) A) for the estate’s records. All executors shown on Form 8971 and
listed on any attached statement are
Download forms, instructions, and Column B. Enter the TIN of each responsible for the reporting requirements
publications; beneficiary listed. If the executor of the related to Form 8971 and Schedule(s) A.
Order IRS products; estate solicited a beneficiary's TIN in However, it is enough for only one of the
Research tax questions; writing and hasn’t received it, enter executors to sign Form 8971.
Search publications by topic or “requested” and attach a copy of the
keyword; and solicitation to Form 8971 to avoid inquiries Form 8971 is signed under penalties of
Sign up to receive local and national tax from the IRS. A supplemental Form 8971 perjury and all executors are responsible
news by email. and corresponding Schedule A must be for the information included on Form 8971
filed with the IRS once the TIN has been and Schedule(s) A as filed with the IRS
Specific Instructions obtained. and Schedules A provided to
Complete Form 8971 and each attached beneficiaries. All executors are also liable
Schedule A in its entirety. A form or for all applicable penalties.

Instructions for Form 8971 and Schedule A 3

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Schedule A — Information description of each item that has been
acquired (or is expected to be acquired) Privacy Act and Paperwork Reduction
Regarding Beneficiaries by a beneficiary. The listing should consist Act Notice. We ask for the information on
Acquiring Property From a of a related property (for example, stocks this form to carry out the Internal Revenue
held in a single brokerage account) and laws of the United States. You are
Decedent required to give us the information. We
only include information relevant to basis
Executors of estates filing Form 8971 are reporting such as name/description of the need it to ensure that you are complying
required to complete a Schedule A for property, value, and valuation date. Do not with these laws and to allow us to figure
each beneficiary that acquired (or is attach property appraisals to Schedule A. and collect the right amount of tax.
expected to acquire) property from the Sections 6035 and 6109, and the
estate. You will need a copy of the Form For more information on details to be regulations require you to provide this
706 or Form 706-NA filed by the estate of included by asset type or schedule, see information.
the decedent to complete this schedule. the Instructions for Form 706 or Form
All property acquired (or expected to be 706-NA. You aren’t required to provide the
acquired) by a beneficiary must be listed Column C. An entry (Y or N) is required information requested on a form that is
on that beneficiary’s Schedule A. If the in this column for each asset. Indicate “Y” subject to the Paperwork Reduction Act
executor hasn't determined which only if estate tax was generated and the unless the form displays a valid OMB
beneficiary is to receive an item of asset contributed to the estate tax (for control number. Books or records relating
property as of the due date of the Form example, the asset wasn't subject to a to a form or its instructions must be
8971 and Schedule(s) A, the executor marital or charitable deduction). retained as long as their contents may
must list all items of property that could be become material in the administration of
Generally, any property that qualifies
used, in whole or in part, to fund the any Internal Revenue law. Generally, tax
for a marital deduction under section 2056
beneficiary’s distribution on that returns and return information are
or 2056A or a charitable deduction under
beneficiary’s Schedule A. (This means confidential, as required by section 6103.
section 2055 won't generate estate tax
that the same property may be reflected However, section 6103 allows or requires
and “N” should be indicated.
on more than one Schedule A.) A the Internal Revenue Service to disclose
supplemental Form 8971 and Column D. Generally, the valuation date information from this form in certain
corresponding Schedule(s) A may, but of property will be the decedent’s date of circumstances. For example, we may
aren’t required to, be filed once the death. If the estate elected to use an disclose information to the Department of
distribution to each such beneficiary has alternate valuation date, list the value of Justice for civil or criminal litigation, and to
been made. the property on the alternate valuation cities, states, the District of Columbia, and
date. See section 2032 for additional U.S. commonwealths or possessions for
Note. A cash bequest acquired (or guidance. use in administering their tax laws. We
expected to be acquired) by a beneficiary may also disclose this information to other
isn’t considered reportable property for Column E. List the value reported on countries under a tax treaty, to federal and
purposes of Form 8971/Schedule A. Form 706 or Form 706-NA. The value state agencies to enforce federal non-tax
reported in column E should be the fair criminal laws, or to federal law
Use and duplicate page A-2 market value as of the decedent's date of enforcement and intelligence agencies to
(Schedule A—Continuation Sheet) if death or any alternate valuation date used combat terrorism. Failure to provide this
additional space is needed to list the for the estate tax return. This value information, or providing false information,
property acquired (or expected to be shouldn’t reflect any post-death may subject you to penalties.
acquired) by a beneficiary. Attach a copy adjustment in value. The full fair market
of each completed Schedule A to Form value of the property acquired (or The time needed to complete and file
8971 and submit to the IRS. Provide a expected to be acquired) by the this form and related schedules will vary
copy of each Schedule A only to the beneficiary is to be reported in column E. depending on individual circumstances.
beneficiary named on that Schedule A. Do This value shouldn’t factor in mortgages, The estimated average time is:
not provide a copy of the Form 8971 to a non-recourse indebtedness, or other
beneficiary. See the instructions under decreases in equity. Recordkeeping . . . . . . . . 3 hr., 49 min.
Where To File, earlier. For partial interests of property, Learning about the law or the
Column A. Number the items received by (including life estates and usufructs) the form . . . . . . . . . . . . . . . 42 min.
the beneficiary. Continue this numbering value reported should reflect the Preparing, copying,
on page A-2 of the proportional value of the partial interest for assembling, and sending the
Schedule A—Continuation Sheet (if each beneficiary. For example, an estate form to the IRS . . . . . . . . 47 min.
necessary). has property valued on the Form 706 at
$400,000. The property is being
Column B. Use the same description in distributed to Beneficiary 1, receiving a
column B that the executor used for the 75% interest in the property, and If you have comments concerning the
property on the Form 706 or Form Beneficiary 2, receiving a 25% interest in accuracy of these time estimates or
706-NA. Include in column B the schedule the property. Schedule A, Part II, column E suggestions for making this form simpler,
and item number where the property was should reflect $300,000 on the Schedule A we would be happy to hear from you. You
reported on Form 706 or Form 706-NA, as for Beneficiary 1 and $100,000 on the can send us comments from www.irs.gov/
applicable. Schedule A for Beneficiary 2. If the value formspubs/. Click on “More Information”
If the beneficiary acquired (or is reported on a Schedule A that has already and then on “Give us feedback.” You can
expected to acquire) a joint interest, been filed with the IRS or provided to a also send your comments to the Internal
fractional interest, or any other interest in beneficiary changes (as a result of the Revenue Service, Tax Forms and
property which is less than 100% of the resolution of a valuation issue or Publications Division, 1111 Constitution
interest reported on the estate tax return, otherwise), you must file a supplemental Ave. NW, IR-6526, Washington, DC
indicate the interest in the property the Form 8971 and associated Schedule(s) A 20224. Do not send the tax form to this
beneficiary will acquire. with the IRS and provide an updated address. Instead, see Where To File,
Listings of bulk assets may be attached Schedule A to each affected beneficiary earlier.
to Schedule A in lieu of a detailed no later than 30 days after the adjustment.

4 Instructions for Form 8971 and Schedule A

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