Table of Contents
- Checkbox for Amended Return
- Checkbox for Revoking Section 1022 Election
- Decedent's Name and Address
- Line 2. Decedent's Social Security Number
- Line 6a. Executor's Name
- Line 6c. Executor's Social Security Number
- Line 9. Names of Recipients
- Line 10. Built-in Loss
- Line 11. Capital Loss Carryforward
- Line 12. Net Operating Loss Carryforward
- Line 12a.
- Line 12b.
- Line 12c. General Basis Increase
- Line 13.
- Line 14.
- Schedule A
- Multiple and partial interests in property.
- Line 1a—Executor's Name
- Line 2a—Name and Address of Recipient
- Line 2b—Recipient's Taxpayer Identification Number
- Line 3—Property Acquired from the Decedent with Adjusted Basis Greater Than or Equal to FMV
- Line 4—Property Acquired From the Decedent With Adjusted Basis Less Than FMV
- Line 4B—Total Allocation of Basis Increase
- Schedules R and R-1—GST Exemption
If this is an amended or supplemental return, check the box for an amended return. If the amended return is filed under Regulations section 301.9100-2, also write “FILED PURSUANT TO SECTION 301.9100-2” at the top of the return.
If this Form 8939 revokes a previous Section 1022 Election made on an earlier Form 8939, check the box for revocation of an election.
If the decedent was a nonresident or resident alien and did not have and was not eligible to get a social security number (SSN), the executor must apply for an individual taxpayer identification number (ITIN) on behalf of the decedent. For details on how to do so, see Form W-7 and its instructions. It takes 6 to 10 weeks to get an ITIN. If the decedent already had an ITIN, enter it wherever the decedent's SSN is requested on Form 8939.
An ITIN is for tax use only. It does not entitle the holder to social security benefits or change the holder's employment or immigration under U.S. law.
If there is more than one executor, enter the name of the executor filing this Form 8939. List the other executors’ names, addresses, and SSNs (if applicable and if known) on an attached sheet.
Only individual executors should complete this line. If there is more than one individual executor, all should list their SSNs on an attached sheet.
Enter the name of each recipient, other than the decedent's surviving spouse, of property acquired from the decedent.
Enter the aggregate amount of any losses that would have been allowable under section 165 if the property acquired from the decedent had been sold at FMV immediately before the decedent's death. In the case of a decedent who was a nonresident not a citizen of the United States, enter zero. For more information, see Unrealized Losses, earlier.
Enter the aggregate amount of any capital loss carryforward under section 1212(b) that would (but for the decedent's death) have been carried from the decedent's last tax year to a later tax year of the decedent. In the case of a decedent who was a nonresident not a citizen of the United States, enter zero. For more information, see Carryforwards, earlier.
Enter the aggregate amount of any NOL carryover under section 172 that would (but for the decedent's death) have been carried from the decedent's last tax year to a later tax year of the decedent. In the case of a decedent who was a nonresident not a citizen of the United States, enter zero. For more information, see Carryforwards, earlier.
You can use Schedule A of Form 1045, Application for Tentative Refund to figure the amount, if any, of the decedent's NOL.
Add lines 10, 11, and 12. This line 12a is the amount of the Carryovers/Unrealized Losses Increase.
For nonresident decedents who were not United States citizens, enter $60,000. For all others, enter $1,300,000.
Add lines 12a and 12b. This line 12c is the total General Basis Increase that is available to allocate to property acquired from and owned by the decedent.
Enter the sum of the totals from all Schedules A, line 4B, column (e)(i) on this line. This total may not exceed the amount listed on line 12c.
Enter the total from each Schedule A, line 4B, column (e)(ii) on this line. This total may not exceed $3,000,000.
Complete a separate Schedule A—Disclosure of Property Acquired From the Decedent (and Recipient Statement) for each recipient of property acquired from the decedent, including each of the following.
The decedent's estate.
The decedent's surviving spouse, if any.
Any QTIP or other trust.
Each other person who acquires property from the decedent by bequest, devise, inheritance, or otherwise by reason of the death of the decedent to the extent that such property passed without consideration.
Each property or interest in property required to be disclosed on Form 8939 must be reported on a Schedule A.
For an undivided or fractional interest in property held by and received from the decedent by the recipient listed on line 2a, describe only the undivided or fractional interest. For a life estate or remainder interest in property, where the partial interest received by the recipient listed on line 2a was created by the bequest or devise made by the decedent, however, Basis Increase may be allocated only to the entire property owned by the decedent. Therefore, assuming the decedent’s adjusted basis in the entire property is less than the FMV of the property at the date of death, describe the undivided interest in property (including the decedent’s adjusted basis, the property’s FMV at the date of death, and the amount of Basis Increase allocated by the executor) on an attachment to Line 4 or in column (a) of Line 4. Also include in this description the applicable section 7520 rate, the life tenant’s age, and the recipient’s actuarial factor at the decedent’s date of death. Compute the recipient’s portion of adjusted basis, FMV, and basis increase allocation (allocated on an actuarial basis between the income and the remainder interests), and list the recipient’s share of each in columns (b) through (f) on line 4.
For property transferred in trust with an income and remainder interest, the trust is considered the sole recipient of the property.
Donald died on October 10, 2010, owning real property. Donald originally acquired the property on December 10, 2007. As of Donald's date of death, the property has an FMV of $967,000 and an adjusted basis of $425,000. Donald devised the property to Larry for life, with remainder to Rachel. At the time of Donald's death, Larry is 48 years old. The section 7520 rate for October 2010 is 2.0 percent. Donald's executor, Edward, makes the Section 1022 Election by timely filing Form 8939. Edward allocates $542,000 of General Basis Increase to the property. See Attachment to Larry's Schedule A, on the next page and Attachment to Rachel's Schedule A, later.
Enter the name and address of the recipient of the property acquired from the decedent reported on this Schedule A.
If the person named in line 2a is an individual, enter the SSN or ITIN, as applicable, of that individual. If the person named in line 2a is a corporation, partnership, trust, estate, or other entity, enter the entity's employer identification number (EIN).
List each item of property (other than cash) acquired from the decedent by the person listed on line 2a the basis of which at the time of death is greater than or equal to its FMV at the date of death. Number each item of property in the left-hand column.
Real property. Describe the real estate in enough detail so that the property could be easily located.
For each parcel of real estate, report the area.
For city or town property, report the street and number, ward, subdivision, block and lot, etc.
For rural property, report the township, range, landmarks, etc.
Stocks. For stocks, list:
The number of shares;
The exact name of corporation; and
The principal exchange upon which sold, if listed on an exchange.
Bonds. For bonds, list:
The quantity and denomination;
The name of obligor;
Date of maturity;
Interest due date; and
The principal exchange, if listed on an exchange.
Tangible personal property. Accurately describe any tangible personal property (for example, works of art, jewelry, furs, silverware, books, statuary, vases, oriental rugs, coin or stamp collections) received by the person listed on line 2a in enough detail so that such property could be easily identified by its description.
List each item of property (other than cash) acquired from the decedent by the person listed on line 2a the basis of which at the time of death is less than its FMV at the date of death.
Number each item of property in the left-hand column. Four categories of property can be reported here.
Property that receives an allocation of both General Basis Increase in column (e)(i) and also Spousal Property Basis Increase in column (e)(ii).
Property that receives only an allocation of Spousal Property Basis Increase in column (e)(ii).
Property that receives only an allocation of General Basis Increase in column (e)(i).
Property that receives no allocation of increase to basis.
Do not include in column (e)(i) or (e)(ii) of line 4 any adjustments to basis other than adjustments to basis under section 1022(b) or (c). For example, do not include in column (e)(i) or (e)(ii) any adjustments to basis required or permitted under sections 469, 1016, or 2654.
Add column (e)(i) and (e)(ii) and place the sum on line 4B. The sum of line 4B, column (e)(i) of all Schedules A may not exceed the amount on line 12c, General Basis Increase, on page 1. Enter the sum of line 4B, column (e)(i) from all Schedules A on line 13 of page 1. Enter the sum of line 4B, column (e)(ii), from all Schedules A on line 14, of page 1.
Schedule R is used to allocate the generation-skipping (GST) exemption. Schedule R-1 is used to inform the trustee of certain trusts of the amount of GST exemption allocated to such trusts. Because the GST tax rate for 2010 is zero, these schedules are not used to compute the GST tax. For certain definitions and general rules that may be applicable, see the instructions to Schedule R in the instructions to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return.
Part 1, line 8, Part 2, line 4, and line 4 of Schedule R-1 are used to allocate the decedent's GST exemption. This allocation is made by filing Form 8939 and attaching a completed Schedule R and/or R-1. Once made, the allocation is irrevocable. You are not required to allocate all of the decedent's GST exemption. However, the portion of the exemption that you do not allocate will be allocated by the IRS under the deemed allocation at death rules of section 2632(e).
For transfers made through 1998, the GST exemption was $1,000,000. Beginning in 2010, the GST exemption is $5,000,000; however, the tax rate on generation-skipping transfers made in 2010 is 0%. The exemption amounts for 1999 through 2009 are as follows:
|Year of transfer||GST exemption|
|2004 and 2005||1,500,000|
|2006, 2007, and 2008||2,000,000|
The amount of each increase can only be allocated to transfers made (or appreciation that occurred) during or after the year of the increase. The following example shows the application of this rule:
In 2003, G made a direct skip of $1,120,000 and applied her full $1,120,000 of GST exemption to the transfer. G made a $450,000 taxable direct skip in 2004 and another of $90,000 in 2006. For 2004, G can only apply $380,000 of exemption ($380,000 inflation adjustment from 2004) to the $450,000 transfer in 2004. For 2006, G can apply $90,000 of exemption to the 2006 transfer, but nothing to the transfer made in 2004. At the end of 2006, G would have $410,000 of unused exemption that she can apply to future transfers (or appreciation) starting in 2007.
To inter vivos direct skips and
Beginning with transfers made after December 31, 2000, to lifetime transfers to certain trusts, by the decedent, that constituted indirect skips that were subject to the gift tax.
Enter the GST exemption included on lines 2 through 5 of Part 1 of Schedule R, and discussed above, that was allocated to the trust.
Allocate the amount on line 7 of Part 1 of Schedule R in line 8, column D. Value the trust as of the date of death. You should inform the trustee of each trust listed on line 8 of the total GST exemption you allocated to the trust. The trustee will need this information to compute the GST tax on future distributions and terminations.
The trustee must know the trust's inclusion ratio to figure the trust's GST tax for future distributions and terminations. You are not required to inform the trustee of the inclusion ratio and may not have enough information to compute it. Therefore, you are not required to make an entry in column E. However, column E and the worksheet below are provided to assist you in computing the inclusion ratio for the trustee if you wish to do so.
You should inform the trustee of the amount of the GST exemption you allocated to the trust. Line 8, columns C and D may be used to compute this amount for each trust.
This worksheet will compute an accurate inclusion ratio only if the decedent was the only settlor of the trust. You should use a separate worksheet for each trust (or separate share of a trust that is treated as a separate trust).
WORKSHEET (inclusion ratio):
|1||Total FMV of all of the property interests that passed to the trust|
|2||State death taxes and other charges actually recovered from the trust|
|3||Subtract line 2 from line 1|
|4||Add columns C and D of line 8|
|5||Divide line 4 by line 3|
|6||Trust's inclusion ratio. Subtract line 5 from 1.000|
|More Online Instructions|