Wednesday, January 29, 2014
As I have previously discussed, the IRS recently announced Rev. Proc. 2014-18, which will extend the time for a widow or widower to carry over the estate tax exemption of their spouse and add it to their own (known as portability).
To elect portability, the executor must file an estate tax return even if no tax is due. The return was due nine months after death with a six-month extension allowed. Many people didn’t elect portability in time so the IRS decided to cut them a break by extending the time to elect to December 31, 2014.
This extension only applies to taxpayers who were not required to file an estate tax return, meaning that extensions will only apply to those filing Form 706 in order to carry over the “deceased spousal unused exclusion amount.” Those taking advantage of this extension should write at the top of their form, “FILED PURSUANT TO REV. PROC. 2014-18 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A)."
See Deborah L. Jacobs, IRS Extends Key Deadline for New Tax Break, Forbes, Jan. 28, 2014.