Complete Form 8971 to report assets allocated to beneficiaries (706)
Form 8971, along with a copy of every Schedule A, is used to report values to the IRS. One Schedule A is provided to each beneficiary receiving property (real estate property) from an estate.
The beneficiaries you select can't be the
Surviving Spouse
or a Trust beneficiary
receiving QTIP property.note
Form 8971 became a calculating form in 2016 UltraTax CS.
To report assets on Form 8971, do the following:
- If you're allocating an asset to a single beneficiary:
- Enter the beneficiary, other than theSurviving SpouseorTrust beneficiaryreceiving QTIP property, from theBeneficiary / ratiodropdown.
- If you're allocating an asset among multiple beneficiaries:
- Enter the beneficiary information for each beneficiary on theNamesscreen in theBeneficiaryfolder.
- For each beneficiary, go to theBenescreen, also in theBeneficiaryfolder, and create a ratio.
- On theAssetscreen in theAssetfolder, go to the asset to be assigned and select the appropriate ratio from theBeneficiary / ratiodropdown.
Example
Let's assume there's 4 beneficiaries that are splitting an asset equally (25% each). You'd enter data like this:
- Add all 4 beneficiaries via theNamesscreen in theBeneficiaryfolder. After entering all 4 beneficiaries, there would be 4 units of Screen Names.
- On theBenescreen in theBeneficiaryfolder, a ratio would be created with a 25% allocation amount entered for each beneficiary input screen. Let's useRatio #1and title it, 'Equal allocation (25% each)' and enter 25.0000 in thePercentfield. Again, this is for each beneficiary input screen unit.
- Go to theAssetscreen in theAssetfolder and selectEqual allocation (25% each)from theBeneficiary / ratiodropdown.
