In case you missed it, the IRS has finally released the final version of Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent, and its related instructions. So what is Form 8939 to be used for? According to the IRS, "Form 8939 is an information return used to report information about property acquired from a decedent and to allocate basis increase to certain property acquired from a decedent." What does this mean in plain English?


Form 8939 is to be used by the heirs of the estates of decedents who died in 2010 who want to elect to apply the modified carryover basis rules to their benefactor's estate as opposed to the estate tax rules. As a general rule the form will be filed for 2010 estates that exceed $5 million, but whether to file Form 8939 or apply the estate tax rules must be determined on a case by case basis.

Form 8939 must be filed on or before January 17, 2012. Extensions of time to file the form will generally not be granted and amended forms may be filed only in limited circumstances. Information on extensions and amendments can be found in the instructions and Notice 2011-66.

Links to Form 8939 and it instructions:

• Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent
• Form 8939 Instructions

Further Reading:

• What is Form 8939?
• What Are the Modified Carryover Basis Rules?
• Overview of 2010 Estate and Gift Tax Rules