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September 21, 2017

Another Chance for Some to Elect Portability

Please read important disclosures HERE.

An estate tax portability election allows a surviving spouse of a decedent who died in 2011 and after to receive the unused portion of their partner’s federal estate tax exemption. Before portability, the unused exemption of the first spouse to die was often lost if the couple did not set up a B trust (By-Pass Trust) when the first spouse died.

When the portability provisions were passed in 2010, the portability election had to be made with in months of death on an estate tax return. Many executors and advisors were unaware of the benefit, especially if the estate was not taxable and no estate tax return was required to be filed. Since the portability provisions were passed, the IRS has received numerous requests for relief from the missed portability election.

Recently issued Revenue Procedure 2017-34, effective immediately, gives the estates of people who died in 2011 and after and whose estates were below the filing threshold requirement until January 2, 2018 (or two years from the date of death if the person died after January 2, 2016) to file an estate tax return and make the portability election.

With the specter of estate tax uncertainty in the current administration, if your spouse died after 2010 and you did not file an estate tax return, you should consider discussing with your professional advisors whether you should take advantage of the recent ruling to obtain this tax benefit.

Please read important estate planning disclosures here.

Filed under: Estate Planning

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