The ruling, in Revenue Procedure 2014-18, extends the time to take advantage of this tax break, which has been dubbed “portability”. The ruling was introduced on an interim basis starting in 2011 and made permanent with the American Taxpayer Relief Tax Act of 2012.
By enabling this “portability,” Congress allows widows and widowers to carry over the estate tax exemption of the spouse who died most recently and add it to their own. At current rates this enables married couples to transfer $5.34 million apiece ($10.68 million together) tax-free.
To take advantage of this option, or “elect portability,” the executor handling the estate of the spouse who died must file an estate tax return (IRS Form 706), even if no tax is due. This return is due nine months after death with a six-month extension allowed.
The Revenue Procedure now allows an executor to elect portability for a person who:
- Died after Dec. 31, 2010, and on or before Dec. 31, 2013;
- Was a citizen or resident of the United States on the date of death; and
- Had a surviving spouse.
The Revenue Procedure indicates that you should write at the top of the form that the return is “FILED PURSUANT TO REV. PROC. 2014-18 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A).”
Source: Forbes Magazine at http://www.forbes.com/sites/deborahljacobs/2014/01/28/irs-extends-key-deadline-for-new-tax-break/
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Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
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