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Regulation and Compliance > Federal Regulation > IRS

IRS Posts Estate Tax Portability Guidance

By Allison Bell

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The Internal Revenue Service (IRS) has given estate executors advice about how to help a surviving spouse use a new federal law to take advantage of the deceased spouse’s unused exclusion amount.

The IRS has posted the advice in IRS Notice 2011-82, a document that describes the estates can use to take advantage of Section 303(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRUIRJCA).

TRUIRJCA Section 303(a) added Section 2010(c)(5)(A) to the Internal Revenue Code (IRC).

IRC Section 2010(c)(5)(A) eases portability – the process the living spouse uses to take over any estate tax exclusion not used by the spouse who has died.

To take advantage of the provision and make a “portability election,” the executor of an estate of a decedent who died after Dec. 31, 2010, must file a Form 706 federal estate tax form with the IRS, officials say.

To make the portability election, the executor must file a Form 706 even if the estate would not normally have to file a Form 706, officials say.

The IRS will be assuming that most Form 706 filers will make a portability election, but it also gives rules filers can use to avoid making a portability election.

The IRS and its parent, the U.S. Treasury Department, intend to issue regulations to implement IRC Section 2010(c), and the procedures given in the regulations should be similar to the procedures described in the guidance, officials say.

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