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taxmap/pubs/p4895-000.htm#en_us_publink100012900
Publication 4895

Tax Treatment of Property Acquired From a Decedent Dying in 2010

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Reminders(p1)


Throughout this publication, section references are to the Internal Revenue Code unless otherwise noted.
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More information.(p1)

For more information about the latest developments on Publication 4895, go to www.irs.gov/pub4895. For information about Form 8939 and its instructions go to www.irs.gov/form8939.
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Election required.(p1)

In order for the modified carryover basis rules described in this publication to apply to property you acquired from a decedent who died in 2010, the estate's executor must make a valid and timely election (Section 1022 Election) on Form 8939, Allocation of Increase in Basis for Property Received From a Decedent. If the executor does not make a valid and timely Section 1022 Election, the rules in effect for determining basis in property acquired from a decedent who died immediately before 2010 will apply. For information on the rules applicable if the Section 1022 Election is not made, see Pub. 551.

taxmap/pubs/p4895-000.htm#TXMP3fd740bfIntroduction

This publication is designed to help executors and individuals who acquired property from a decedent dying in 2010, for which the Section 1022 Election has been made, determine the tax treatment of the property acquired. See Property Acquired From the Decedent, later.
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Comments and suggestions.(p1)

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We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:

Internal Revenue Service 
Individual and Specialty Forms and Publications Branch 
SE:W:CAR:MP:T:I 
1111 Constitution Ave. NW, IR-6526 
Washington, DC 20224


We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
You can email us at taxforms@irs.gov. Please put "Publications Comment" on the subject line. You can also send us comments from www.irs.gov/formspubs/, select "Comment on Tax Forms and Publications" under "Information about."
Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.
taxmap/pubs/p4895-000.htm#en_us_publink1000253292
Ordering forms and publications.(p1)
Visit www.irs.gov/formspubs/ to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received.

Internal Revenue Service 
1201 N. Mitsubishi Motorway 
Bloomington, IL 61705-6613


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Tax questions.(p2)
If you have a tax question, check the information available on IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.

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Useful items

You may want to see:


Publication
 551 Basis of Assets
 555 Community Property
 559 Survivors, Executors, and Administrators
Form (and Instructions)
 8939: Allocation of Increase in Basis for Property Received From a Decedent
 706: United States Estate (and Generation-Skipping Transfer) Tax Return
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Section 1022 Election(p2)

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The executor of an estate of a decedent who died in 2010 can elect to apply modified carryover basis treatment to property acquired from the decedent under section 301(c) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRUIRJCA). If the election is made, the estate will not be subject to federal estate tax and does not need to file a Form 706 even if the value of the estate is $5,000,000 or more. As a result, section 1014 generally does not apply to determine the recipient’s basis in property acquired from the decedent. Instead, section 1022 applies to determine the recipient’s basis in most (but not all) property acquired from the decedent. This election is referred to as the Section 1022 Election.
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Form 8939(p2)

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Form 8939 is an information return used by the executor of a decedent who died in 2010:
  1. To make the Section 1022 Election;
  2. To report information about property acquired from a decedent (defined in Property Acquired From the Decedent, later); and
  3. To allocate Basis Increase (defined in Basis Increase, later) to certain property acquired from a decedent.
For detailed information about the Section 1022 Election, see Notice 2011-66, 2011-35 I.R.B. 184, available at www.irs.gov/irb/2011-35_IRB/ar09.html and Notice 2011-76, 2011-40 I.R.B 479, available at www.irs.gov/irb/2011-40_IRB/ar13.html. For optional safe harbor guidance under section 1022, see Revenue Procedure 2011-41, 2011-35 I.R.B. 188, available at www.irs.gov/irb/2011-35_IRB/ar10/html.
The Section 1022 Election is made when the executor timely files Form 8939. The due date for Form 8939 is January 17, 2012. For more information on the filing due date, see When to File in the Instructions for Form 8939.
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Effect of the Section 1022 Election(p2)

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If the executor makes the Section 1022 Election, special rules apply. These rules include the following.
If the executor makes the Section 1022 Election and follows the provisions of section 4 of Revenue Procedure 2011-41, and takes no return position contrary to any provisions of section 4, the IRS will not challenge the taxpayer’s ability to rely on the provisions of section 4 on either Form 8939 or any other return of tax.
Once made, the Section 1022 Election cannot be revoked after the due date for filing Form 8939.
Note.If the executor does not make a valid and timely Section 1022 Election, the rules in effect for determining basis in property acquired from a decedent who died immediately before 2010 will apply.
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Interaction of Section 1022 with Other Income Tax Provisions(p2)

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For information on how property acquired from the decedent for which a Section 1022 Election has been made is treated with respect to certain income tax provisions (including holding period, tax character, and depreciation) see Rev. Proc. 2011-41, section 4.06.