IRS Reminds Estates Of New Tax Break
Wednesday, October 5, 2011
The United States Internal Revenue Service (IRS) has reminded estates of married
individuals dying after 2010 that they must file an estate tax return, before
October 31, to pass along their unused estate and gift tax exclusion amount
to their surviving spouse.
It was explained that, available for the first time this year, the new portability
election allows estates of married taxpayers to pass along the unused part of
their exclusion amount, normally USD5m in 2011, to their surviving spouse. Enacted
last December, this provision eliminates the need for spouses to retitle property
and create trusts solely to take full advantage of each spouse’s exclusion
The IRS expects that most estates of people who are married will want to make
the portability election, including people who are not required to file an estate
tax return. However, it confirmed that the only way to
make the election is by properly and timely filing an estate tax return, and
that there are no special boxes to check, or statements needed, to make the
The first estate tax returns for estates eligible to make the portability election
(because the date of death is after December 31, 2010) are due as early as October
3, 2011. This is because the estate tax return is due nine months after the
date of death. Estates unable to meet this deadline can request an automatic
six-month filing extension.
The IRS re-emphasized that the estates of those who died before 2011 are not
eligible to make this election, but that it plans to issue regulations providing
further guidance on this matter and welcomes public comment.