Reminder: Need to Elect Portability by Dec. 31 for 2011-2013 Estates

Estates of 2011, 2012, and 2013 decedents have only a few more weeks until the end of 2014 to elect portability. The IRS provided AICPA requested relief in Rev. Proc. 2014-18, providing an automatic extension of time for certain estates without a filing requirement to elect on or before Dec. 31, 2014, portability of the decedent’s unused exclusion amount for the benefit of the decedent’s surviving spouse, including same sex married couples.

Previously and after 2014, the only method of relief is to seek a private letter ruling from the IRS. This Rev. Proc. relief applies to certain estates of decedents who died after Dec. 31, 2010 and before Jan. 1, 2014, and applies for filings through Dec. 31, 2014. For estates of decedents dying after 2013, practitioners and clients need to make a timely portability election for 2014 and later deaths, or will need to request a private letter ruling (PLR) for relief for missed portability elections.

The AICPA had requested relief for practitioners and estate clients who had missed filing the portability election. In addition, the AICPA requested more guidance on the process for estates of decedents in a same-sex marriage to claim portability of the estate tax exemption if they were not required to, and did not previously, file Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, because they were below the filing threshold. In addition, the AICPA previously requested that IRS issue closing letters to estates that elect portability, and the new Rev. Proc. states that such closing letters will be issued to estates who file under the Rev. Proc.