Updated October 9, 2026. Quick answer: Form 8971 is the form an executor files with the IRS to report the estate tax value of property going to each beneficiary, and a Schedule A copy goes to each heir. For an heir, the number that matters is on the Schedule A, because the instructions say “the beneficiary cannot use a value higher than the value reported on the Schedule A as the beneficiary’s initial basis in the property.” Not every estate files it, and cash, life insurance and retirement accounts are among the property types the IRS lists as excepted.
Related reading on this site: IRS Publication 551.
IRS trust and estate tax forms, read line by line: Form 4810.
IRS estate-administration forms, read line by line: Form 8971 who must file, Form 8971 Part I and Form 8971 penalties.
More IRS forms and schedules, read line by line: Form 8821 instructions.
Who files Form 8971, and who receives a Schedule A
The form is the executor’s job. The instructions put the duty this way: “An executor of an estate or other person(s) required to file Form 706 or Form 706-NA (estate tax return) under IRC section 6018(a) or 6018(b) is required to file Form 8971 and furnish Schedules A to certain beneficiaries.” The form itself is titled “Information Regarding Beneficiaries Acquiring Property From a Decedent”, and the instructions explain the split between the two documents: “Form 8971 and copies of Schedules A provide information to the IRS about beneficiaries who acquired property from a decedent. Schedule A provides basis information to beneficiaries who acquire certain property from the decedent.”
That split matters if you are an heir. The executor files the whole Form 8971 with the IRS, but you receive only your own page. The form carries this notice: “To protect privacy, Form 8971 should not be provided to any beneficiary. Only Schedule A of Form 8971 should be provided to the beneficiary.” The instructions repeat it: “Furnish a Schedule A that reports property acquired by a beneficiary to only that beneficiary.”
The filing duty is tied to the estate tax return. The instructions limit it to “an executor of an estate for which a Form 706 or Form 706-NA is filed after July 2015, whether or not that form is filed timely”. The word executor is read broadly: “the term “executor” includes the executor, personal representative, or administrator of the decedent’s estate.” For the estate tax return behind it, see Form 706; for the income tax return an estate may file separately, see Form 1041 for estates.
When no Form 8971 is required
Most estates are never asked to file it, because most estates never file a Form 706. The instructions list the cases where the form is not required:
| Situation | What the instructions say |
|---|---|
| Gross estate plus adjusted taxable gifts and specific exemption below the basic exclusion amount | “Form 8971 isn’t required when:” the first listed case is that the total is “less than the basic exclusion amount applicable in the year of decedent’s death;” |
| Other estate tax forms filed instead of Form 706 | “Estate tax-related forms other than Form 706 or Form 706-NA (for example, Forms 706-QDT, 706-CE, and 706-GS(D)), are filed” |
| Return filed only for a narrow purpose | “The estate tax return is filed solely to make an allocation or election respecting the generation-skipping transfer tax, solely to elect portability of the deceased spousal exclusion amount (DSUE), or solely as a protective filing to avoid a penalty or satisfy a state law requirement.” |
One point surprises executors. Even when a form is required, a Schedule A may not be: “The executor is required to timely file a Form 8971 even if no Schedules A are furnished or required to be furnished when the Form 8971 is filed.” Heirs sometimes wonder whether the form arrives with the estate’s other returns, and the instructions treat it as its own filing, with a Form 8971 that includes “a copy of each Schedule A (if any) furnished or required to be furnished to a beneficiary.”
What the Schedule A tells an heir about basis
The Schedule A exists because of a rule about inherited basis. The instructions explain the purpose: “Basis information is needed by persons who acquire certain property from a decedent in order to comply with the consistent basis requirement of section 1014(f).” The practical effect for the person holding the Schedule A is a ceiling, not a floor. Reading it in three steps:
| Step | What it means for an heir | Wording |
|---|---|---|
| 1 | Look at the value on column (h) | “Enter the estate tax value of the property acquired by the beneficiary.” |
| 2 | Check the limit it sets | “the beneficiary cannot use a value higher than the value reported on the Schedule A as the beneficiary’s initial basis in the property.” |
| 3 | Check that it is yours | “Furnish each Schedule A only to the beneficiary named on that Schedule A.” |
Column (h) is the key. On value, the instructions say “The value reported in column (e) should be the fair market value as of the decedent’s date of death or any alternate valuation date used for the estate tax return.” On debt: “Report the full fair market value of the property, undiminished by debt, regardless of whether the estate tax return reports the net value”. So a mortgage on an inherited rental does not shrink the number on the Schedule A. See the IRA step-up page for why retirement accounts sit outside this system, and the community property page for how a community property interest is reported.
Shared ownership changes the arithmetic. The instructions give a worked case: “if an estate property valued on the Form 706 at $400,000 is distributed to Beneficiary 1 and Beneficiary 2 as equal tenants-in-common, list $200,000 on each beneficiary’s Schedule A.” For community property: “For a community property interest, report only the value of the interest included in the decedent’s estate.”
The following is an illustration with made-up amounts, not an IRS example. It shows why the Schedule A value is a practical anchor when the property is later sold:
| Item | Amount | Note |
|---|---|---|
| Value listed in column (h) of the heir’s Schedule A | $200,000 | Illustration input |
| Later sale price (input to the computed rows below) | $230,000 | Illustration input |
| Gain measured from the Schedule A value | $30,000 | Computed: $230,000 minus $200,000 |
| Gain if a higher figure of $210,000 had been used as basis | $20,000 | Computed: $230,000 minus $210,000. This is the move the consistency rule blocks |
In the illustration, the consistency rule is what prevents the heir from using $210,000 as basis when the Schedule A says $200,000. The instructions describe the penalty exposure: “Beneficiaries who report basis in property that is inconsistent with the amount on the Schedule A may be liable for a 20% accuracy-related penalty under section 6662.” “Beneficiaries who report a basis in property acquired from a decedent that is 200% or more of the correct amount may be liable for a 40% penalty for a gross valuation misstatement under section 6662(h), instead of the 20% penalty.”
Property the form does not cover
The IRS names a category it calls excepted property. For these assets the executor still counts the beneficiary on Form 8971 but does not report the asset on a Schedule A: “However, the executor is not required to provide information for excepted property on a Schedule A.” A sample of the list, in the IRS’s own words:
| Kind of property | Listed by the IRS as excepted property |
|---|---|
| Cash and bank items | “United States dollar-denominated demand deposits”; “Certificates of deposit denominated in United States dollars” |
| Life insurance | “Life insurance proceeds on the life of the decedent payable in a lump sum in United States dollars” |
| Household items | “Household and personal effects for which an appraisal is not required under section 20.2031-6(b) of the Estate Tax Regulations” |
| Property sold before distribution | “Property that, prior to distribution from the estate or the decedent’s revocable trust, is completely sold, exchanged, or otherwise disposed of in one or more transactions that are recognition events for federal income tax purposes” |
| Annuities | “Annuity contracts subject to section 72 and amounts received as an annuity subject to section 72” |
| Retirement accounts | “Interests in and distributions from retirement plans and deferred compensation plans, including individual retirement arrangements as defined in section 408 and 408A, that are expressed entirely in United States dollars” |
The retirement account item is the reason an IRA heir often has no Schedule A line for the account. The reason behind the group is stated for the catch-all item: “Other property having an initial basis that is not in any way determined with regard to or derived from the property’s fair market value for federal estate tax purposes.” Retirement accounts and the rules for children who inherit them are covered in inherited IRA minor child rules.
Deadlines, supplements and penalties
There are two possible due dates and the earlier one controls. The instructions say the form and each Schedule A must go out “no later than the earlier of:” “The date that is 30 days after the date on which Form 706 or Form 706-NA is required to be filed (including extensions) with the IRS;” or “The date that is 30 days after the date Form 706 or Form 706-NA is filed with the IRS.”
Heirs often receive a second Schedule A later. A supplement is required when “A beneficiary acquires property that is not excepted property” and it was not on an earlier Schedule A, or when “There is a change to the information required to be reported on a Form 8971, including Schedules A (or supplements), that causes the information as previously reported to be incorrect or incomplete.” For property acquired after the due date, “the executor must furnish a Schedule A to that beneficiary with regard to that acquired property on or before January 31 of the year following the beneficiary’s acquisition of that property.”
Penalties fall on the executor, not the heir, for the filing side. The instructions warn that “An executor may be subject to penalties for failure to file and/or furnish correct Forms 8971 and Schedules A even if there was no tax due on the estate tax return.” The instructions have a reasonable cause exception, and they send you elsewhere for the amounts: “For the amount of the penalty (including a minimum penalty for intentional disregard of the filing requirement), see IRS.gov/Payments/Information-Return-Penalties.”
Which revision applies
The edition read for this page is the Instructions for Form 8971 and Schedule A (Rev. August 2025) together with the August 2025 form, which is the revision irs.gov served when it was read on 2026-10-09. A later revision can change what is reported or when, so check the revision printed on the Schedule A you receive. The form prints “Form 8971 (Rev. 8-2025)” and the instructions point to updates: “For the latest information about developments related to Form 8971 and its instructions, such as legislation enacted after they were published, go to IRS.gov/Form8971.”
Every Form 8971 part and schedule page in one table
Each row links to the page that reads a part, section or line group of Form 8971. The right column is the summary each page carries.
| Page | What it covers |
|---|---|
| Form 8971: Who Must File, When to File, Excepted Property | Who must file Form 8971, when and where it goes, who gets a Schedule A, and which property counts as excepted property, from the IRS instructions. |
| Form 8971 Part I Lines 1 to 9: Decedent and Executor | What goes on Form 8971 line A and Part I lines 1 to 9: decedent, executor, multiple executors and the alternate valuation date. |
| Form 8971 Part II Lines 1 to 9: Beneficiary Information | How to fill Form 8971 Part II lines 1 to 9: beneficiary counts, columns (a) to (e), the TIN ’requested’ entry and the line 9 total. |
| Schedule A (Form 8971) Parts I and II: Property and Value | How to fill Schedule A (Form 8971): who gets one, Part I lines 1 to 8, Part II columns (a) to (h), the totals and the notice to beneficiaries. |
| Form 8971 Penalties and Supplemental Filings Explained | What the IRS instructions say about Form 8971 and Schedule A penalties, reasonable cause, the de minimis rule, inconsistent basis and supplements. |
Common mistakes
- Using a higher figure than the value on the Schedule A as basis because it feels closer to what the property is worth now. The instructions say the beneficiary cannot use a value higher than the one reported on the Schedule A as initial basis.
- Assuming a missing Schedule A means a missing Form 8971 obligation. The instructions say the executor must timely file Form 8971 even if no Schedules A are furnished, and a Schedule A may simply be omitted for excepted property.
- Expecting an inherited retirement account to appear with a stepped up value. The IRS lists retirement plan interests expressed entirely in dollars among excepted property.
Related: why an IRA gets no step-up, community property double step-up, Form 1041 for estates, and Form 706.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare vetted advisors for inherited property basis
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2–3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor plans for inherited assets
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Instructions for Form 8971 and Schedule A (Rev. August 2025): https://www.irs.gov/pub/irs-pdf/i8971.pdf
- Form 8971 (Rev. August 2025): https://www.irs.gov/pub/irs-pdf/f8971.pdf
Read from the IRS documents linked above on October 9, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.