Calculating Estate Tax Portability Exclusion Amount: Filing Form 706, Rev Proc 2017-34 and Missed Election Relief

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A


Conducted on Wednesday, August 18, 2021

Recorded event now available

or call 1-800-926-7926
Course Materials

This course will provide tax advisers with a comprehensive guide to the computation and reporting of the deceased spouse's unused exclusion change to “Deceased Spousal Unused Exclusion” (DSUE). The panel will explain when portability should be elected and demonstrate the calculation to show the DSUE amount transferred from the deceased spouse to the surviving spouse.

Description

Portability is a game-changer in estate planning. Whether the federal estate tax basic exclusion amount reverts in 2026 to $5,000,000 as adjusted for inflation under current law, or recent proposed law changes are enacted that reduce the basic exclusion amount to $3,500,000, ensuring that the unused exclusion of the first spouse to die can be used by the surviving spouse (or surviving spouse’s estate) is a critical part of planning for married couples. Determining the DSUE amount involves complex and critical calculations. The tax preparer makes the portability election when a federal estate tax return is filed for the first spouse.

The regulations governing portability require the executor of a decedent's estate to calculate the deceased spouse's unused exemption (DSUE) and report the amount on the estate tax return to elect portability for the surviving spouse. The regulations define the DSUE amount and prescribe a multi-step process for calculating the unused exemption amount.

The key for tax and estate advisers to remember is that portability is not automatic--the executor must elect it. The election requires filing a Form 706 U.S. Estate Tax Return to report the DSUE amount, even when filing an estate return may not be required. The surviving spouse can utilize the DSUE of the deceased spouse as an additional gift or estate tax exclusion. Missing the election to port an exemption can prove costly. Revenue Procedure 2017-34 offers relief for certain untimely elections.

Listen as our experienced panel provides detailed and practical guidance on calculating DSUE amounts, discusses the planning opportunities, guidance for missed elections, and offers illustrations on how to report those amounts on Form 709.

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Outline

  1. Estate Tax Overview – Electing Portability
  2. Deceased Spousal Unused Exclusion (“DSUE”)
  3. Calculating and reporting DSUE on IRS Form 706
  4. Reporting DSUE on Form 709
  5. Case Illustration – Calculating DSUE
  6. Filing Form 706 Solely To Elect Portability
  7. Missed elections
  8. Impact of Potential Law Changes on Portability

Benefits

The panel will review these and other critical components of estate portability reporting and DSUE calculations:

  • How to calculate DSUE amounts per IRS guidelines
  • Relief for missed portability elections
  • Determining whether to recommend portability election
  • Simplified rules for estates filing a Form 706 return for the sole purpose of electing portability
  • Reporting DSUE on Estate Tax Return Form 706 for a surviving spouse
  • Reporting DSUE on Gift Tax Return Form 709 for a surviving spouse

Faculty

Daneri, James
James R. Daneri

Partner
Blanchard Krasner & French

Mr. Daneri focuses his practice in the areas of estate planning, taxation, and business law. His estate planning...  |  Read More

Maxwell, Robert
Robert M. Maxwell, Esq.

Director of Estate and Trust Settlement and Glenmede
Glenmede

Mr. Maxwell is Director of Estate and Trust Settlement for Glenmede. He is responsible for oversight of estate...  |  Read More

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