Today, the IRS released proposed regulations that provide guidance regarding the application of the modified carryover basis rules of section 1022. The proposed regulations would affect property transferred from certain decedents who died in 2010.
The proposal reflects changes to the law made by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (TRUIRJCA). EGTRRA made the estate tax inapplicable to the estate of anyone who died in 2010 and enacted section 1022 regarding a modified carryover basis system to apply in 2010. TRUIRJCA retroactively reinstated the estate and generation-skipping transfer taxes, but allowed the executor of the estate of a decedent who died in 2010 to elect application of section 1022. The proposed rules would modify provisions of the Treasury regulations involving basis rules by including a reference to section 1022 where appropriate.
Comments and hearing requests will be due August 10.