The IRS issued Rev. Proc. 2017-34 effective on June 9, 2017 to provide a simplified method to certain estates to make the portability election. This simplified method is available to estates who would otherwise not be required to file a Form 706. Based on the Rev. Proc. 2017-34, estates for decedents passing after December 31, 2010 might be permitted to file a Form 706 to elect portability of the decedent’s unused exemption as long as all requirements have been met. A person permitted to make the election on behalf of the estate of a decedent, must file a complete and properly prepared Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, on or before the later of January 2, 2018, or the second annual anniversary of the decedent’s date of death. 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 § 2010(c)(5)(A)”. Please see below for the requirements to qualify for the relief for late portability elections.
This comes as great news to estates who missed the deadline for filing this election. Prior to this Rev. Proc. estates that missed the filing deadline had only one option which was to submit a private letter ruling to request to file a late election at a cost $10,000.
The simplified method of this revenue procedure is available to the executor if:
- The decedent:
- was survived by a spouse;
- died after December 31, 2010; and
- was a citizen or resident of the United States on the date of death.
- The executor is not required to file an estate tax return under § 6018(a) as determined based on the value of the gross estate and adjusted taxable gifts and without regard to the need to file for portability purposes
- The executor did not file an estate tax return within the time required by § 20.2010-2(a)(1) for filing an estate tax return