Treasury and IRS issue final regulations on portability elections

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The IRS issued final regulations (T.D. 9725) on the estate and gift tax applicable exclusion and requirements for electing portability of a deceased spousal unused exclusion (DSUE) amount under Section 2010(c). The final regulations also include the rules for the surviving spouse’s use of the DSUE amount.  

The regulations are effective June 12, 2015, and mostly mirror the proposed regulations, which were issued three years prior, in June 2012.  Some commenters requested that the final regulations extend the time under Treas. Reg. Sec. 301-9100-2 and -3 (9100 relief) to elect portability under Section 2010(c). Under Section 2010(c), portability is effective only if made on a timely filed estate tax return.  The final regulations do not extend 9100 relief to missed elections for estates that are required to file an estate tax return, but do extend 9100 relief to estates with a gross estate value below the required threshold and thus are not otherwise required to file an estate tax return.

In response to comments on the impact of the credits in Sections 2012 through 2015 on computing the DSUE amount, the final regulations clarify that eligibility for credits against the tax imposed by Section 2001 does not factor into the computation of the DSUE amount.

David Walser
+1 602 474 3410

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