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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.
To report assets on Form 8971, do the following:
  • If you're allocating an asset to a single beneficiary:
    1. Enter the beneficiary, other than the
      Surviving Spouse
       or
      Trust beneficiary
       receiving QTIP property, from the
      Beneficiary / ratio
       dropdown.
  • If you're allocating an asset among multiple beneficiaries:
    1. Enter the beneficiary information for each beneficiary on the
      Names
       screen in the
      Beneficiary
       folder.
    2. For each beneficiary, go to the
      Bene
       screen, also in the
      Beneficiary
       folder, and create a ratio.
    3. On the
      Asset
       screen in the
      Asset
       folder, go to  the asset to be assigned and select the appropriate ratio from the
      Beneficiary / ratio
       dropdown.

Example

Let's assume there's 4 beneficiaries that are splitting an asset equally (25% each). You'd enter data like this:
  1. Add all 4 beneficiaries via the
    Names
     screen in the
    Beneficiary
     folder. After entering all 4 beneficiaries, there would be 4 units of Screen Names.
  2. On the
    Bene
     screen in the
    Beneficiary
     folder, a ratio would be created with a 25% allocation amount entered for each beneficiary input screen. Let's use
    Ratio #1
     and title it, 'Equal allocation (25% each)' and enter 25.0000 in the
    Percent
     field. Again, this is for each beneficiary input screen unit.
  3. Go to the
    Asset
     screen in the
    Asset
     folder and select
    Equal allocation (25% each)
     from the
    Beneficiary / ratio
     dropdown.
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