Skip to the main content.
972.421.1099 Get Started
972.421.1099 Get Started

1 min read

Automatic Extension Available for Making Portability Election

Automatic Extension Available for Making Portability Election

portability election estate tax exemption

Portability allows a surviving spouse to apply a deceased spouse’s unused estate tax exemption amount toward his or her own transfers during life or at death.

To secure these benefits, however, the deceased spouse’s executor must have made a portability election on a timely filed estate tax return.

 

The return is due nine months after death, with a six-month extension option.

 

Unfortunately, estates that aren’t otherwise required to file a return (because they don’t meet the filing threshold) often miss the deadline. Several years ago, the IRS offered a simplified procedure for obtaining an extension, but it was available only through the end of 2014. After that, the only option was to request a private letter ruling from the IRS, a time-consuming, expensive process with no guarantee of success.


In 2017, however, the IRS made it easier (and cheaper) for estates to obtain an extension of time to file a portability election. For all deaths after 2010, IRS Revenue Procedure 2017-34 grants an automatic extension, provided:


• The deceased was a U.S. citizen or resident,
• The executor wasn’t otherwise required to file an estate tax return and didn’t file one by the deadline,
• The executor files a complete and properly prepared estate tax return on Form 706 within two years of the date of death, and
• The following language appears at the top of the return: “FILED PURSUANT TO REV. PROC. 2017-34 TO ELECT PORTABILITY UNDER §2010(c)(5)(A).”


If your spouse predeceases you and you’d benefit from portability, be sure that your spouse’s estate files a portability election by the applicable deadline. Contact us with any questions you have regarding portability.
© 2018

 

 

A job loss is bad but the tax implications could make it worse

A job loss is bad but the tax implications could make it worse

Unemployment has been holding steady recently at 3.7%. But there are still some people losing their jobs — particularly in certain industries...

Read More
Applying for a commercial loan with confidence

Applying for a commercial loan with confidence

Few and far between are businesses that can either launch or grow without an infusion of outside capital. In some cases, that capital comes in the...

Read More
New option for unused funds in a 529 college savings plan

New option for unused funds in a 529 college savings plan

With the high cost of college, many parents begin saving with 529 plans when their children are babies. Contributions to these plans aren’t tax...

Read More