Avoid These Common Unclaimed Property Reporting ErrorsTax Professionals Resource
August 24, 2012 — 1,323 views
The transference of property, money or other assets can be a complicated process, especially when it involves someone who has died or there are unclear lines of ownership. However, the sheer sums of financial assets involved make this an incredibly important procedure.
According to the National Association of Unclaimed Property Administrators (NAUPA), $1.754 billion was returned to rightful owners in 2006. Moreover, there is still at least $32.877 billion in unclaimed assets. Because of this, the process of identifying owners and properly reporting the inheritance of unclaimed property is crucial to millions of Americans each year.
Unsurprisingly, the method used for reporting income from unclaimed property is intricate and elaborate, and it is ripe for accidental or intentional impropriety. To avoid the hardships that could ensue from failing to obey regulations, here are a few of the most common unclaimed property reporting errors.
There are different ways to file a report for unclaimed property, including electronically, online and by paper. The correct way to do this varies by state, so it is important to get in touch with the bureau from your state to identify the proper method. The correct reporting techniques could save you a lot of trouble down the road and prevent any penalties or legal action.
Again, the obligatory information and codes vary by state, but there are several forms of data that are necessary to most reports. Failing to include any of these pieces could result in a returned request and is one of the most common mistakes among reporters.
The relationship to the owner and property type are almost always required on reports. For property that has been accruing interest, the rate is also essential to any complete filing.
Another common error in reporting unclaimed property is failing to consider the proper time frame. Depending on its type, there is a certain length of time before any property can be rightfully considered unclaimed. Any attempt to categorize it as such before this date will cause reporting error.
Likewise, there are certain dates that must be obeyed after an asset becomes unclaimed property. Contacting the bureau in your state can help you stay informed of the proper filing schedule and correct dates to file a report.