Surviving Spouses have More Time, Less Complex Method for Electing Portability of a Deceased Spouse’s Unused Estate Tax Exemptions by Jack Winter, CPA/PFS

Posted on July 11, 2017 by Jack Winter


The IRS recently issued guidance that provides widows and widowers with an easier and less costly method to transfer a deceased spouse’s unused estate and gift tax exclusion to themselves. Making this portability election essentially allows surviving spouses to protect double the amount of assets from federal estate and gift tax liabilities during their lifetime and at death.  In 2017, the federal estate tax exclusion is $5,490,000. Any assets over this amount are subject to a 40 percent tax rate.


Under the updated regulations, a widow or widower whose spouse died after January 2, 2016, will have up two years to elect portability of a Deceased Spouse Unused Exemption (DSUE).  Doing so requires a timely filing of IRS Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, even in instances in which the estate’s value is so small that a filing would not otherwise be required.


Previously, portability required the filing of an estate tax return no more than 15 months after the date of the first spouse’s death. If an estate missed this deadline, it could request a letter ruling from the IRS and pay fees as high as $10,000. In applying the new guidance retrospectively, however, the IRS is permitting estates of decedents who died between January 1, 2011, and January 2, 2016, and that were not previously required to file an estate tax return, to make a portability election before January 2, 2018, or on the second anniversary of the decedent’s date of death, whichever date is later.  As a result, widows and widowers whose spouses passed in the past six years will have a new opportunity to maximize their estate tax savings.


The advisors and accountants with Berkowitz Pollack Brant work with individuals, family estates and business owners to navigate complex laws and implement tax efficient strategies intended to build and preserve wealth.


About the Author: Jack Winter, CPA/PFS, CFP, is an associate director with Berkowitz Pollack Brant’s Tax Services practice, where he works with individual taxpayers and entrepreneurs on estate planning, tax structuring and business consulting.  He can be reached at the CPA firm’s Ft. Lauderdale, Florida, office at (954) 712-7000 or via email