Estates Get Simplified Method to Request Extended Time to Make Portability Election

By Alistair M. Nevius, J.D.

From the IRS

The IRS issued a revenue procedure that provides executors of certain estates a simplified way to request an extension of time to make the “portability” election to transfer a deceased spouse’s unused estate tax exclusion to the surviving spouse (Rev. Proc. 2014-18). Under the simplified method, an executor will have until Dec. 31, 2014, to make the election by filing Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, rather than having to go through the process of making a letter ruling request to get an extension of time to make the election. Until Jan. 1, 2015, for estates meeting the above requirements, the executor must use the simplified method in lieu of requesting a letter ruling.

Temporary regulations issued in 2012 require executors to file Form 706 to make the election to transfer the deceased spousal unused exclusion (DSUE) to the surviving spouse. To make the election, executors must file Form 706, computing the DSUE amount, even if the estate would not otherwise be required to file an estate tax return. Unfortunately, because they are not otherwise required to file Form 706, some executors have failed to make the election.

The simplified method can be used by the executor of an estate of a decedent who died after Dec. 31, 2010, and on or before Dec. 31, 2013, who has a surviving spouse, and who is a U.S. citizen or resident of the United States on the date of death. In addition, the estate must not be required to file an estate tax return under Sec. 6018(a), and the executor must not have filed an estate tax return during the time period required to elect portability.

To qualify for relief under the revenue procedure, the executor must file a complete and properly prepared Form 706 for the estate on or before Dec. 31, 2014, and must write “FILED PURSUANT TO REV. PROC. 2014-18 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A)” at the top.

If the executor meets these requirements, he or she will be deemed to have satisfied the conditions for relief under Regs. Sec. 301.9100-3, and relief will automatically be granted to extend the time to elect portability.

The simplified method does not apply to estates that timely filed an estate tax return under the temporary regulations to elect portability.

Executors of estates that do not meet the requirements of the revenue procedure, including those that died after Dec. 31, 2013, may request an extension by making a letter ruling request under Regs. Sec. 301.9100-3.

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