In a Revenue Procedure, IRS has provided a permanently available simplified method for estates to obtain an extension of time to make the estate tax portability election. The simplified method is only available to estates that are not required to file an estate tax return based on the value of the gross estate and is effective June 9, 2017. Revenue Procedure 2017-34, provides a simplified method to obtain an extension on time under § 301.9100-3 to file a return to elect portability of the deceased spousal unused exclusion (DSUE) amount pursuant to § 2010(c)(5)(A). This revenue procedure applies to estates that are not normally required to file an estate tax return because the value of the gross estate and adjusted taxable gifts is under the filing threshold in §6018(a).
A taxpayer who meets the requirements listed below will be deemed to meet the requirements for relief under Reg. § 301.9100-3, and relief is granted under the provisions of Reg. § 301.9100-3 to extend the time to elect portability under Code Sec. 2010(c)(5)(A). Accordingly, for purposes of electing portability, the taxpayer’s Form 706 will be considered to have been timely filed in accordance with Reg. § 20.2010-2(a)(1). (Rev Proc 2017-34, Sec. 4.02)
In order to qualify for the automatic extension, the following requirements must be met:
- The taxpayer is the executor of the estate of a decedent who:
- Has a surviving spouse;
- Died after Dec. 31, 2010; and
- Was a citizen or resident of the U.S. on the date of death;
- The taxpayer is not required to file an estate tax return under Code Sec. 6018(a) (as determined based on the value of the gross estate and adjusted taxable gifts, without regard to the need to file for portability purposes);
- The taxpayer did not file an estate tax return within the time prescribed by Reg. § 20.2010-2(a)(1) for filing an estate tax return required to elect portability;
- The executor must file a complete and properly-prepared Form 706 on or before the later of Jan. 2, 2018, or the second annual anniversary of the decedent’s date of death; and
- The executor filing the Form 706 on behalf of the decedent’s estate must state at the top of the Form 706 that the return is “FILED PURSUANT TO REV. PROC. 2017-34 TO ELECT PORTABILITY UNDER Code Sec. 2010(c)(5)(A)”. (Sec. 3.01; Sec. 4.01)
Through the later of January 2, 2018, or the second anniversary of a decedent’s date of death, the exclusive procedure for obtaining an extension of time under Reg. § 301.9100-3 to make a portability election under Code Sec. 2010(c)(5)(A) for the estate of a decedent, if the decedent and executor meet the requirements (1)-(3) above, is the procedure described in requirements (4) and (5) above. (Sec. 7.02)
If an executor of such an estate has filed a request for a letter ruling seeking an extension of time under Reg. § 301.9100-3 to make a portability election under Code Sec. 2010(c)(5)(A), and that letter ruling is pending in the IRS National Office on June 9, 2017, IRS will close its file on the ruling request and refund the user fee, and the estate may obtain the relief granted by this revenue procedure only by complying with requirements (4) and (5) above. (Sec. 7.02).