<?xml version="1.0" encoding="UTF-8"?>
<HTML>
<HEAD>
<META content="text/html; charset=utf-8" http-equiv="Content-Type"/>
<META content="Microsoft Word 12 (filtered medium)" name="Generator"/>
<STYLE><!--
/* Font Definitions */
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Tahoma;
panose-1:2 11 6 4 3 5 4 4 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:12.0pt;
font-family:"Times New Roman","serif";}
h4
{mso-style-priority:9;
mso-style-link:"Heading 4 Char";
mso-margin-top-alt:auto;
margin-right:0in;
mso-margin-bottom-alt:auto;
margin-left:0in;
font-size:12.0pt;
font-family:"Times New Roman","serif";
font-weight:bold;}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:blue;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:purple;
text-decoration:underline;}
p
{mso-style-priority:99;
mso-margin-top-alt:auto;
margin-right:0in;
mso-margin-bottom-alt:auto;
margin-left:0in;
font-size:12.0pt;
font-family:"Times New Roman","serif";}
span.signature-truncate
{mso-style-name:signature-truncate;}
span.Heading4Char
{mso-style-name:"Heading 4 Char";
mso-style-priority:9;
mso-style-link:"Heading 4";
font-family:"Cambria","serif";
color:#4F81BD;
font-weight:bold;
font-style:italic;}
span.EmailStyle22
{mso-style-type:personal-reply;
font-family:"Times New Roman","serif";
color:black;
font-weight:normal;
font-style:normal;}
.MsoChpDefault
{mso-style-type:export-only;
font-size:10.0pt;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
/* List Definitions */
@list l0
{mso-list-id:800615863;
mso-list-template-ids:-1920535854;}
ol
{margin-bottom:0in;}
ul
{margin-bottom:0in;}
--></STYLE><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
</HEAD>
<BODY lang="EN-US" link="blue" vlink="purple">
<DIV class="WordSection1">
<P class="MsoNormal"><SPAN style="font-size:11.0pt;color:black">John, the federal reporting requirement was mandated by Congress when it passed the highway law back in July (the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015;
what does that have to do with basis???). While the statute was effective immediately, the IRS Notice defers enforcement until next February. Sounds to me like the IRS was caught a little off guard.<O:P/></SPAN></P>
<P class="MsoNormal"><SPAN style="font-size:11.0pt;color:black"><O:P> </O:P></SPAN></P>
<P class="MsoNormal"><SPAN style="font-size:11.0pt;color:black">As you say, with no need to track basis, I can’t imagine why DOR or the Legislature would have any reason to impose a similar requirement. But I’ve been surprised before . . . .<O:P/></SPAN></P>
<P class="MsoNormal"><SPAN style="font-size:11.0pt;color:black"><O:P> </O:P></SPAN></P>
<DIV>
<P class="MsoNormal"><B><SPAN style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:black">________________________________________<O:P/></SPAN></B></P>
<P class="MsoNormal"><B><SPAN style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:black">THOMAS M. CULBERTSON
</SPAN></B><B><SPAN style="font-size:14.0pt;font-family:"Calibri","sans-serif";color:black"> </SPAN></B><SPAN style="font-size:14.0pt;font-family:"Calibri","sans-serif";color:black">I
</SPAN><SPAN style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black"> Lukins & Annis, PS<O:P/></SPAN></P>
<P class="MsoNormal"><SPAN style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">717 W. Sprague Ave, Suite 1600, Spokane, WA 99201<O:P/></SPAN></P>
<P class="MsoNormal"><SPAN style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">(509) 455-9555</SPAN><SPAN style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:black">
</SPAN><SPAN style="font-family:"Calibri","sans-serif";color:black"> I </SPAN><SPAN style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black"> fax (509) 363-2500</SPAN><SPAN style="font-family:"Calibri","sans-serif";color:black"> I
</SPAN><SPAN style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black"> </SPAN><SPAN style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:black"><A href="mailto:tculbertson@lukins.com"><SPAN style="font-size:10.0pt;color:blue">tculbertson@lukins.com</SPAN></A></SPAN><SPAN style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">
<O:P/></SPAN></P>
<P class="MsoNormal"><SPAN style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black"><O:P> </O:P></SPAN></P>
</DIV>
<P class="MsoNormal"><SPAN style="font-size:11.0pt;color:black"><O:P> </O:P></SPAN></P>
<DIV>
<DIV style="border:none;border-top:solid #B5C4DF 1.0pt;padding:3.0pt 0in 0in 0in">
<P class="MsoNormal"><B><SPAN style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</SPAN></B><SPAN style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbapt-bounces@lists.wsbarppt.com [mailto:wsbapt-bounces@lists.wsbarppt.com]
<B>On Behalf Of </B>sullaw@comcast.net<BR/>
<B>Sent:</B> Monday, August 24, 2015 12:54 PM<BR/>
<B>To:</B> WSBA Probate & Trust Listserv<BR/>
<B>Subject:</B> [WSBAPT] State Estate Tax Basis Return<O:P/></SPAN></P>
</DIV>
</DIV>
<P class="MsoNormal"><O:P> </O:P></P>
<DIV>
<DIV>
<P class="MsoNormal"><SPAN class="signature-truncate"><SPAN style="font-family:"Arial","sans-serif";color:black">Listmates:</SPAN></SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
</DIV>
<DIV>
<P class="MsoNormal"><SPAN style="font-family:"Arial","sans-serif";color:black"> <O:P/></SPAN></P>
</DIV>
<DIV>
<P class="MsoNormal"><SPAN class="signature-truncate"><SPAN style="font-family:"Arial","sans-serif";color:black">Did you notice this in today's news? Does anybody know whether the DOR will require a similar report on the state estate tax return? Doesn't seem
like they should, given the lack of an income/capital gains tax in WA.</SPAN></SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
</DIV>
<DIV>
<P class="MsoNormal"><SPAN style="font-family:"Arial","sans-serif";color:black"> <O:P/></SPAN></P>
</DIV>
<DIV>
<H4 align="center" style="text-align:center;line-height:13.2pt"><SPAN style="font-family:"Arial","sans-serif";color:black">Notice 2015-57, 2015-36 IRB<O:P/></SPAN></H4>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">In a Notice, IRS has announced a delayed due date for filing returns with IRS and providing statements to beneficiaries
under the rules requiring consistent basis reporting for transfer tax and income tax purposes that were signed into law on July 31, 2015. For each such return or statement that would otherwise be required to be filed with IRS or furnished to a beneficiary
before Feb. 29, 2016, the due date will be Feb. 29, 2016. </SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><EM><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">Background.</SPAN></EM><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222"> The executor
or administrator of a decedent's estate must file the estate tax return. (Code Sec. 6018(a))
</SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">If the executor or administrator is unable to make a complete return with respect to any part of the gross estate, he
must include in his return all the information he has, including a description of such part and the name and address of every person holding a legal or beneficial interest in such part. If they are notified by IRS, such legal or beneficial owners must then
file returns as to their parts of the estate. (Code Sec. 6018(b)) </SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">On July 31, 2015, President Obama signed into law the Surface Transportation and Veterans Health Care Choice Improvement
Act of 2015 (P.L. 114-41; the Act). Section 2004 of the Act enacted Code Sec. 1014(f) and Code Sec. 6035. (See Weekly Alert ¶ 2 08/06/2015 for more details.)
</SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">Under the Act, effective for property with respect to which an estate tax return is filed after July 31, 2015, the basis
of any property to which Code Sec. 1014(a) (i.e., the rules for determining basis of property acquired from a decedent) applies can't exceed:</SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<OL start="1" style="margin-top:0in" type="1">
<LI class="MsoNormal" style="color:#222222;margin-top:3.75pt;margin-bottom:3.75pt;line-height:13.2pt;mso-list:l0 level1 lfo1">
<SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif"">In the case of property, the final value of which has been determined for purposes of the estate tax on the estate of the decedent, such value.
</SPAN><SPAN style="font-family:"Arial","sans-serif""><O:P/></SPAN></LI><LI class="MsoNormal" style="color:#222222;margin-top:3.75pt;margin-bottom:3.75pt;line-height:13.2pt;mso-list:l0 level1 lfo1">
<SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif"">In the case of property not described in (A), above, and with respect to which a statement has been furnished under new Code Sec. 6035(a) (see below) identifying the value of such property, such
value. (Code Sec. 1014(f)(1)) </SPAN><SPAN style="font-family:"Arial","sans-serif""><O:P/></SPAN></LI></OL>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">Code Sec. 6035 imposes new reporting requirements with regard to the value of property included in a decedent's gross
estate for federal estate tax purposes. </SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">Code Sec. 6035(a)(1) provides that the executor of any estate required to file an estate tax return under Code Sec.
6018(a) must furnish, both to IRS and the person acquiring any interest in property included in the decedent's gross estate for federal estate tax purposes, a statement identifying the value of each interest in such property as reported on such return and
such other information with respect to that interest as IRS may prescribe. </SPAN>
<SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">Under Code Sec. 6035(a)(2), each person required to file a return under Code Sec. 6018(b) must furnish, both to IRS
and each other person who holds a legal or beneficial interest in the property to which such return relates, a statement identifying the information described in Code Sec. 6035(a)(1).
</SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">Code Sec. 6035(a)(3)(A) provides that each statement required to be furnished under Code Sec. 6035(a)(1) or Code Sec.
6035(a)(2) must be furnished at such time as IRS may prescribe, but in no case at a time later than the earlier of: (i) the date which is 30 days after the date on which the return under Code Sec. 6018 was required to be filed (including extensions, if any);
or (ii) the date which is 30 days after the date such return is filed. </SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">Code Sec. 6035(b) authorizes IRS to prescribe such regs as necessary to carry out Code Sec. 6035.</SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><EM><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">Returns, statements not due until February, 2016.</SPAN></EM><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">
Notice 2015-57 provides that, for statements required under Code Sec. 6035(a)(1) and Code Sec. 6035(a)(2) to be filed with IRS or furnished to a beneficiary
<EM><SPAN style="font-family:"Arial","sans-serif"">before</SPAN></EM> Feb. 29, 2016, the due date under Code Sec. 6035(a)(3) is delayed to Feb. 29, 2016.
</SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222">This delay is to allow IRS to issue guidance implementing the reporting requirements of Code Sec. 6035. Executors and
other persons required to file or furnish a statement under Code Sec. 6035(a)(1) or Code Sec. 6035(a)(2) should not do so until the issuance of forms or further guidance by IRS addressing the requirements of Code Sec. 6035.
</SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
<P style="margin:0in;margin-bottom:.0001pt;line-height:13.2pt"><STRONG><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:black">References:</SPAN></STRONG><SPAN style="font-size:10.5pt;font-family:"Arial","sans-serif";color:#222222"> For
returns and statements for inherited property, see FTC 2d/FIN ¶ S-2309 . For rules limiting basis of property acquired from decedents, see FTC 2d/FIN ¶ P-4022.
</SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><O:P/></SPAN></P>
</DIV>
<DIV>
<P class="MsoNormal"><SPAN style="font-family:"Arial","sans-serif";color:black"> <O:P/></SPAN></P>
</DIV>
<DIV>
<P class="MsoNormal"><SPAN class="signature-truncate"><SPAN style="font-family:"Arial","sans-serif";color:black">Best regards,
</SPAN></SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><BR/>
<SPAN class="signature-truncate">JOHN J. SULLIVAN, </SPAN><BR/>
<SPAN class="signature-truncate">ATTORNEY</SPAN><BR/>
<BR/>
<SPAN class="signature-truncate">LYONS | SULLIVAN</SPAN><BR/>
<SPAN class="signature-truncate">10655 NE 4TH STREET, SUITE 704</SPAN><O:P/></SPAN></P>
</DIV>
<DIV>
<P class="MsoNormal"><SPAN class="signature-truncate"><SPAN style="font-family:"Arial","sans-serif";color:black">BELLEVUE, WASHINGTON 98004</SPAN></SPAN><SPAN style="font-family:"Arial","sans-serif";color:black"><BR/>
<SPAN class="signature-truncate">425•451•2400 - <A href="http://www.PSPROBATES.COM">
WWW.PSPROBATES.COM</A></SPAN><O:P/></SPAN></P>
</DIV>
<DIV>
<P class="MsoNormal" style="margin-bottom:12.0pt"><SPAN style="font-family:"Arial","sans-serif";color:black"><BR/>
<SPAN class="signature-truncate"><B>Confidentiality Notice</B></SPAN><BR/>
<BR/>
<SPAN class="signature-truncate">This email transmission is intended only for the addressee named above. It contains information that is privileged, confidential, or otherwise protected from use and disclosure. If you are not the intended recipient, you are
hereby notified that any review, disclosure, copying, or dissemination of this transmission or the taking of any action in reliance on its contents or other use is strictly prohibited. If you have received this transmission in error, please destroy the original
and notify us by telephone immediately. Thank you for your cooperation.</SPAN><O:P/></SPAN></P>
</DIV>
</DIV>
</DIV>
<P><PRE>--
This message has been scanned for viruses
and dangerous content by Lukins & Annis, P.S.

NOTICE: This email may contain confidential or
privileged material, and is intended solely
for use by the above referenced recipient. Any
review, copying, printing, disclosure, distri-
bution, or any other use, is strictly prohibited.

If you are not the recipient, and believe that
you have received this in error, please notify
the sender and delete the copy you received.

Thank You!
</PRE></P></BODY></HTML>