The IRS has issued a new rule that once again makes filing for an extension of time to make a spousal portability election simpler.
Making a spousal portability election, allows a surviving spouse to utilize a deceased spouse’s estate tax exemption when the surviving spouse passes away. It can be a great way to decrease the estate tax burden for a married couple.
However, the rule has always suffered from a couple of problems.
The first is that the surviving spouse is not always aware of the rule and if it is a good idea for him or her to use. The second problem is that there is not much time (nine months) after a spouse passes away to make a spousal portability election.
These two problems combine to make it difficult for many people to file a portability election before time runs out. It used to be that the IRS had a simple method in these cases for people to file for an extension of time to make the decision, but that rule expired in 2014.
People could still request extensions, but it was difficult and expensive to do so.
The Journal of Accountancy reports that the IRS has made it easier again in “IRS provides simplified method to request an extension of time to make a portability election.”
Of course, nothing with the IRS is completely simple and easy.
The new rule offers some relief, but there are still requirements and time limits to keep in mind. There is also paperwork that needs to be completed and filed in the correct way.
This new rule does make things simpler, but surviving spouses should still seek the advice of estate attorneys to help navigate the spousal portability election procedure.
Reference: Journal of Accountancy (June 9, 2017) “IRS provides simplified method to request an extension of time to make a portability election.”
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