Draft Form 706 addresses portability of a deceased spouse’s unused estate and gift tax exclusion amount and provides a check box for the executor to opt out of electing portability of the unused portion.
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TOPICS / ESTATES
Estate Tax
IRS Issues Rules on Portability Election
The IRS has issued temporary regulations on how to elect to use a deceased spouse’s unused exclusion from estate taxes, also known as the portability election.
IRS Extends Portability Election for Some Estates
Some executors who missed a deadline to apply a decedent’s unused estate and gift tax exclusion amount to a surviving spouse received an extension.
Important Lessons Regarding Valuation Issues
Taxpayers with high income and high net worth should be diligent regarding the valuation process and ensure they have used thorough and well-documented appraisal methodologies.
Estate Planning for International Clients
It is essential for clients with multiple citizenship or residency to understand that the timing and manner of cross-border wealth transfers fundamentally affect their ability to minimize tax burdens.
Estimated Amount of State Income Tax Claim Not Deductible on Estate Tax Return
The Ninth Circuit held that an estate could deduct as a claim against it only the amount of state income tax and interest with respect to the income on a transaction that the estate ultimately paid, not the amount that it estimated at the time of the decedent’s death it would have to pay on the income.
Portability Election Extended for Some Estates
Some executors who missed a deadline to apply a decedent’s unused estate and gift tax exclusion amount to a surviving spouse received an extension Feb. 17.
Estate Tax Treatment of Grantor Retained Interests Clarified
The IRS issued final regulations providing guidance on the portion of property (held in trust or otherwise) includible in the grantor’s gross estate if the grantor has retained the use of the property or the right to an annuity, unitrust, graduated retained interest, or other payment from the property for life, for any period not ascertainable without reference to the grantor’s death, or for a period that does not in fact end before the grantor’s death.
Estate Tax Protective Claim and Portability Election Procedures Detailed
The IRS issued guidance on filing a protective claim for refund of estate tax and notifying the IRS that the claim is ready for consideration, and to alert executors to the need to file Form 706 to make an election allowing the decedent’s spouse to receive the decedent’s unused estate and gift tax exemption.
2010 Estate Tax Payment and Carryover Basis Election Extended
Executors of estates of most decedents who died in 2010 can now get an automatic extension until March 19, 2012, to pay any estate tax due as well as to file an estate tax return, the IRS announced on September 13.
Estate Tax Protective Claim Procedures Detailed
The IRS issued guidance on filing a protective claim for refund of estate tax and notifying the IRS that the claim is ready for consideration.
Carryover Basis Election for 2010 Decedents’ Estates
The IRS issued guidance on the time and manner for making the election not to have estate tax apply to estates of decedents who died in 2010 (Notice 2011-66). The election must be made by November 15, 2011.
Estates Must File Form 706 to Make Portability Election
The IRS alerted executors of the estates of decedents dying after December 31, 2010, of the need to file a Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, within the time prescribed by law (including extensions).
2010 Estate Tax Payment, Carryover Basis Election Extended
Executors of estates of most decedents who died in 2010 now can get an automatic extension until March 19, 2012, to pay any estate tax due as well as to file an estate tax return, the IRS announced on September 13.
Estate Tax Form, Instructions Finalized for 2010; Due September 19
The IRS posted the instructions for Form 706 for decedents dying in 2010. For most 2010 decedents, the due date is September 19.
IRS Issues Guidance on Carryover Basis Rules for 2010 Decedents’ Estates
The IRS issued guidance on the time and manner for making the election not to have estate tax apply to estates of decedents who died in 2010.
Portability of Unused Estate and Gift Tax Exclusion Between Spouses
One of the essential elements in the equation for the computation of both the federal gift and estate tax is the reduction of the tax due by the amount of the estate or gift tax on the applicable exclusion amount. Because of changes to the tax law, a surviving spouse may be able to increase his or her applicable exclusion amount by the amount of the unused exclusion amount of the deceased spouse. The term “applicable exclusion amount” has been redefined to include the sum of the basic exclusion amount and the deceased spousal unused exclusion amount.
Death and Taxes: Executors Beware
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act revised tax law for estates of decedents dying in 2010, 2011, or 2012. The new rules apply for 2010 unless an executor elects to use prior law.
The Estate Tax Dilemma: Protecting the Interest Expense Deduction on Estate Loans
If the requirements can be met, Graegin loans can be an indispensible option for estates seeking liquidity to pay expenses without liquidating the underlying estate assets.
Tax Court Uses Cost-to-Partition Approach to Value Fractional Interest Discount
A recent Tax Court case provides a road map for calculating the fractional interest discount in the absence of credible comparable sales data.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
