New Tax Return Due Dates

On July 31, 2015, President Obama signed into law P.L. 114-41, the "Surface Transportation and Veterans Health Care Choice Improvement Act of 2015" (the Act). The Act includes a number of important tax provisions mostly relating to tax return due dates. The main idea of the due date revisions is to have tax returns for flow-through entities (partnerships or S-corps) due before the tax returns they flow to (individuals and C-corps).

 

Corporate, Partnership, and Trust Due Dates Revised

 

Under current law, domestic corporations (including S corporations) with a fiscal year must file their returns by the 15th day of the third month after the end of the tax year; thus, those with a calendar year must file their returns by Mar. 15 of the following year. The partnership return is due on the 15th day of the fourth month after the end of the partnership's tax year; thus, those with a calendar year must file their returns by Apr. 15 of the following year.

 

Since the partnership return date is the same as for individuals, those taxpayers holding partnership interests often must file for an extension to file their returns because their Schedule K-1s don't arrive until the last minute.

 

New Law

In a major restructuring of entity return due dates, effective generally for 2016 tax returns:

 

  • C corporations will have to file by the 15th day of the fourth month after the end of the tax year; thus, those with a calendar year will have to file by Apr. 15 of the following year. Thus, the filing deadline for C corporations will be deferred for one month. For these returns the automatic extension period will be 5 months making the final due date September 15th.

  • Both partnerships and S corporations will have to file their returns by the 15th day of the third month after the end of the tax year; thus, those with a calendar year will have to file by March 15 of the following year. Thus, the due date for S corporations stays the same but for partnerships the due date will be accelerated by one month.

  • The due date for trust returns will continue to be April 15th. For those trusts filing form 1041 the automatic extension will be for 5 ½ months ending on September 30 and for those trusts filing form 5227 rather than the previous 3 month automatic extension and the not automatic additional 3 month extension the automatic extension will now be 6 months ending October 15th.

 

FBAR Due Date Revised

FinCEN Form 114, Report of Foreign Bank and Financial Accounts (aka FBAR), is used to report a financial interest in or signature authority over a foreign financial account. Under the current law, the FBAR must be received by the Department of the Treasury on or before June 30th of the year immediately following the calendar year being reported. The June 30 filing date may not be extended.

 

New law

 

Under Act. Sec. 2006(b)(11), for returns for tax years beginning after Dec. 31, 2015, the due date of FinCEN Report 114 will be April 15 with a maximum extension for a 6-month period ending on October 15 and with provision for an extension under rules similar to the rules in Reg. § 1.6081-5. For any taxpayer required to file Form 114 for the first time, any penalty for failure to timely request for, or file, an extension, may be waived by the Treasury Secretary.


Summary of Changes

 

 

Current Law

New Law (effective Jan 1, 2015)

Due Date

Extended Due Date

Due Date

Extended Due Date

Individual

1040

April 15

October 15

April 15

October 15

C-corp

1120

March 15

September 15

April 15

September 15

S-corp

1120-S

March 15

September 15

March 15

September 15

Partnership

1065

April 15

September 15

March 15

September 15

Trust

1041

April 15

October 15

April 15

September 30

Trust

5227

April 15

July 15,
October 15

April 15

October 15

FBAR

FinCEN Form 114

June 30

N/A

April 15

October 15

 

Consistent Basis Reporting for Transfer Tax and Income Tax Purposes

 

The basis of property acquired from a decedent generally is the fair market value (FMV) of the property on the decedent's date of death. Similarly, property included in the decedent's gross estate for estate tax purposes generally must be valued at its FMV on the date of death.

 

Although the same valuation standard applies to both provisions, pre-Act law does not explicitly require that the recipient's basis in that property be the same as the value reported for estate tax purposes.

 

New Law

 

The Act imposes a new basis consistency standard—in general, the basis of property received by reason of death under Code Sec. 1014 must equal the value of that property for estate tax purposes. A new information reporting requirement, is designed to ensure that the basis consistency standard is met.

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