This article covers recent developments in estate tax, including the portability election, proposed regs. on the alternate valuation date, FLPs.
Estate tax exemption
Draft Form 706 instructions provide guidance for electing the portability of a deceased spouse’s unused estate tax exclusion amount and for the executor’s use of the check box to opt out of electing portability of the unused portion of the exclusion amount.
The IRS issued regulations on how to elect to use a deceased spouse’s unused exclusion from estate taxes, also known as the portability election.
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.
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.
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.
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.
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.
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).
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.
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.
This article examines developments in estate, gift, and generation-skipping tax planning and compliance between June 2009 and May 2010.
Despite the impending confusion, there are some steps tax practitioners can take in working with clients to ensure their estates are in the best position over the next few years.
As 2010 approaches, tax legislators and policy makers are sharply divided on a more permanent approach to taxing the transfer of wealth from one generation to the next.