Each taxpayer is allowed - for federal gift, estate, and Generation Skipping Tax purposes - an exemption of $5,490,000 (for 20017 - the amount adjusts annually). For decedents' estates who do not take full advantage of the exemption, the IRS Code allows - for gift and estate tax, but not for Generation Skipping Tax - any unused exemption to be "ported" to the decedent's surviving spouse.
This "portability" must be elected by the estate of the first spouse to die on a timely filed federal estate tax return.
The IRS, in Revenue Procedure 2017-34, had announced that it will allow - for estates of certain decedents that are not otherwise required to file a federal estate tax return - the election to be made on a late filed return, provided the return is filed by the later of January 2, 2018 or the second anniversary of the decedents death.
Relief is not available in all cases - the IRS pronouncement must be carefully reviewed to ensure compliance - but provides welcome relief at low cost compared to the prior procedure.
This blog is not intended to constitute, and does not constitute, legal advise to anyone or any specific situation. See also our legal notices.