August 5, 2022 - Douglas Myser

Estates can elect late portability option. The IRS issued revenue procedure 2022-32 that allows estates to elect "portability" of a deceased spousal unused exclusion exclusion amount as much as five years after the decedent's date of death. Estates of decedents dying after Dec. 31, 2010, who are survived by a spouse, if not required to file an estate tax return, may do so under Sec. 2010 (c)(5)(A) for the sole purpose of passing on the decedent spouse's DSUE to the surviving spouse, who may add his or her own basic exclusion amount under Sec. 2010(c)(2)(b) in calculating an applicable credit amount. The due date of an estate tax return required to elect portability is nine months after the decedent's date of death or the last day of the period covered by an extension (if an extension of time for filing has been obtained). Estates can elect late portability option.

In Rev. Proc. 2017-34, the IRS provided a simplified method for obtaining an extension of time under Regs. Sec. 301.9100-3 to make a portability election under Sec. 2010(c)(5)(a) if that estate was not required by Sec. 6018(A) to file an estate tax return. Under Rev. Proc. 2017-34, this simplified method (which is used in lieu of the letter ruling process) is available for two years after the decedent's date of death. The IRS stated in Rev. Proc. 2022-32 that, even since it began offering the two year relief period, 'The IRS has continued to issue numerous letter rulings" from estates that missed that deadline, placing "a significant burden" on IRS resources. A significant percentage of these requests came before the fifth anniversary of the decedent's date of death, however. Estates can elect late portability option.

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