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Publication 559 - Introductory Material

Table of Contents

What's New

Public Law 111-312, Act section 301:

  1. Reinstated the estate tax for 2010,

  2. Repealed the modified carryover of basis rules of section 1022 for property acquired from a decedent who died in 2010, and

  3. Created a special election that elects out of the estate tax rules for 2010 and uses the modified carryover of basis rules (section 1022) for property acquired from a decedent dying in 2010.

If the special election is not made, the rules for determining basis of property acquired from a decedent who died in 2010 are the same as the rules for property acquired from a decedent who died in 2008 or 2009. This publication helps those in charge of the decedent’s estate that did not make the special election.

This publication does not include a discussion of the application of the special election. Generally, the special election benefits estates that exceed the $5 million applicable exclusion for 2010. For more information about the special election and its application, see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010 and Form 8939, Allocation of Increase in Basis for Property Received From a Decedent.

Reminders

Throughout this publication, section references are to the Internal Revenue Code unless otherwise noted.

Requests for extension to file Form 1041. The automatic extension of time to file Form 1041, U.S. Income Tax Return for Estates and Trusts, has been decreased from six months to five months. You can request an automatic 5-month extension of time to file Form 1041 by filing Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns.

Consistent treatment of estate and trust items. Beneficiaries must generally treat estate items the same way on their individual returns as they are treated on the estate's return.

Photographs of missing children. The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

Introduction

This publication does not discuss the tax effects of the special election for an estate of a decedent dying in 2010, under Public Law 111-312, Act section 301(c). For information regarding the special election, see Publication 4895 and Form 8939.

This publication is designed to help those in charge of the property (estate) of an individual who has died (decedent). It shows them how to complete and file federal income tax returns and points out their responsibility to pay any taxes due.

A comprehensive example, using tax forms, is included near the end of this publication. Also included at the end of this publication are the following items.

  • A checklist of the forms you may need and their due dates.

  • A worksheet to reconcile amounts reported in the decedent's name on information Forms W-2, 1099-INT, 1099-DIV, etc. The worksheet will help you correctly determine the income to report on the decedent's final return and on the return for either the estate or a beneficiary.

Comments and suggestions.   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 
SE:W:CAR:MP:T:T:SP 
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. (The asterisk must be included in the address.) Please put “Publications Comment” on the subject line. Although we cannot respond individually to each email, we do appreciate your feedback and will consider your comments as we revise our tax products.

Useful Items - You may want to see:

Publication

  • 3 Armed Forces' Tax Guide

  • 950 Introduction to Estate and Gift Taxes

  • 4895 Tax Treatment of Property Acquired From a Decedent Dying in 2010

Form (and Instructions)

  • SS-4 Application for Employer Identification Number

  • 56 Notice Concerning Fiduciary Relationship

  • 1040 U.S. Individual Income Tax Return

  • 1041 U.S. Income Tax Return for Estates and Trusts

  • 706 United States Estate (and Generation-Skipping Transfer) Tax Return

  • 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer

  • 8939 Allocation of Increase in Basis for Property Received From a Decedent

 
See How To Get Tax Help near the end of this publication for information about getting publications and forms. Also near the end of this publication is Table A, a handy checklist of forms and their due dates.

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