In 2011, Congress raised the
estate tax exclusion amount to $5 million per person (indexed for inflation) and added portability to the estate tax laws. The portability provision is an election that allows a surviving spouse to carry over any unused portion of their deceased spouse’s estate tax exclusion and shield an increased amount of assets from the estate tax. Under the portability provision a surviving spouse had nine (9) months to make the election or it was lost.
In 2014, the IRS issued Revenue Procedure 2014-18 that provided a simplified method for obtaining an extension of time to make a portability election for estates of decedents dying after 2010, if the estate was not required to file an estate tax return and if the decedent was survived by a spouse. However, the simplified method was available only on or before December 31, 2014. Subsequently, the IRS issued private letter rulings which granted an extension of time to elect portability when the decedent’s estate was not required to file an estate tax return.
To address the tremendous amount of private letter ruling requests, on June 9, 2017, the Internal Revenue Service issued
Revenue Procedure 2017-34 (the “Procedure”). The Procedure, which is effective immediately, provides a new simplified method to obtain permission for an extension of time to file Form 706 (Federal Estate Tax Return) and elect portability. The Procedure is available to all eligible estates through January 2, 2018, or the second anniversary of the decedent’s date of death. If an estate misses the new two (2) year deadline it may still file for a private letter ruling asking for relief to elect portability.
