Federal Tax, Tax

Extension for Transferring Deceased Spousal Unused Exclusion

When taxpayers die, their deceased spousal unused exclusion (DSUE) can be transferred to their surviving spouses. This is usually referred to as “portability.” However, the executor of an estate is required to file an estate tax return within nine months of the decedent’s death that elects portability and describes how the DSUE amount was calculated. In one case, a return wasn’t timely filed and there was a question about whether the spouse had missed the opportunity to claim portability. But in an IRS private letter ruling, the agency granted an extension of 120 days to the spouse. The agency can grant extensions so long as an estate has acted reasonably and in good faith. (PLR 202336003). Contact us with questions. © 2023