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Portability of Gift and Estate Tax Exemption: Planning Considerations, Forms 706 and 709, Missed Election Relief

Recording of a 90-minute CLE/CPE video webinar with Q&A

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Conducted on Tuesday, February 7, 2023

Recorded event now available

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This CLE/CPE webinar will provide trusts and estates counsel and tax advisers guidance on key planning considerations for the portability of gift and estate tax exemptions. The panel will discuss making portability elections, available relief for missed elections, and the computation and reporting of a deceased spouse's unused exclusion change to the deceased spouse's unused exemption. The panel will also provide an overview of the issues that may arise regarding portability of gift and estate tax exemptions and completing Forms 706 and 709.

Description

Estate planning counsel and tax advisers have a powerful tool to achieve significant estate and gift tax savings for clients. Portability's current status requires counsel to consider methods to protect increases in value between spouses' deaths, attain better income tax results, and leverage strategies for diversifying approaches for using applicable exclusion amounts.

Recently, there has been increased focus on certain provisions under current tax law and proposed regulations by estate planners. The federal estate tax basic exclusion amount set to revert to $5 million (adjusted for inflation from 2010 dollars) in 2026, along with final and pending anti-clawback regulations, bolsters the need for ensuring that the unused exclusion of the first spouse to die can be used by the surviving spouse (or surviving spouse's estate) for married couples.

The portability regulations require the executor of a decedent's estate to calculate the deceased spouse's unused exclusion and report the amount on the estate tax return to elect portability for the surviving spouse. Determining this amount involves a multi-step process for calculating the unused exemption amount under the regulations.

By walking you through real world examples for portability to maximize tax benefits for estate planning, our panel will examine the tax savings and other benefits of creating portability-based plans. Missing the election to port an exemption can prove costly. Revenue Procedure 2022-32 offers relief for certain untimely elections.

Listen as our panel discusses portability elections, available relief for missed elections, and the computation and reporting of a deceased spouse's unused exclusion change to the deceased spouse's unused exemption.

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Outline

  1. Gift and estate tax overview: electing portability
    1. Estate, gift, and income tax savings
    2. Mechanics of election
  2. Deceased spousal unused exclusion
  3. Filing Form 706 solely to elect portability
  4. Calculating and reporting on Form 706 and 709
  5. Missed elections
  6. Impact of potential law changes on portability

Benefits

The panel will review these and other key issues:

  • Potential estate, gift, and income tax savings when incorporating portability in an estate plan
  • Mechanics involving elections for special consideration by counsel
  • How to calculate deceased spouse's unused exclusion amounts per IRS guidelines
  • Relief for missed portability elections
  • Determining whether to recommend portability election
  • How the anti-clawback regulations affect the estate exemption
  • Reporting on Estate Tax Return Form 706 for a surviving spouse
  • Reporting on Gift Tax Return Form 709 for a surviving spouse

Faculty

Bunge, John
John Bunge

Partner
Holland & Knight

Mr. Bunge helps clients navigate the complex confluence of tax planning, business succession planning,...  |  Read More

Tucker, Rebekah
Rebekah J. Tucker, CPA

Tax Manager
Anders CPAs + Advisors

As a tax manager, Ms. Tucker works with individuals and privately-held businesses on tax planning and compliance....  |  Read More

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