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News & Analysis
Latest legal news and recent law changes.

Trust Portability Election Extended to Five years

In Rev. Proc. 2022-32, the IRS has made a major announcement advising that portability elections for a Deceased Spousal Unused Exclusion (“DSUE”) are extended to five (5) years [see IRS] after the date of death, vastly expanding the previous deadline of nine (9) months [Former Guidance]. The decision amends § 301.9100-3 of the Procedure and Administration Regulations for “portability” under § 2010(c)(5)(A) of the Internal Revenue Code.

For those not familiar with the concept of a “portability election,” or just needing a refresher, portability allows the spouse of a recent decedent to continue using the decedent’s unused exclusion amount to their own transfers during life and death.  So, for example, in 2026 when the Estate Tax exemption reduces down to around $6 million a person, but a spouse has $10 million in assets after their spouse dies, they can “port” over the $6 million if unused by their former spouse, and have a $12 million exemption even though their spouse is no longer living.

Of note, however, is that the extension of the portability election time does not mean that the time allowed for a refund application is also extended. The potential applicant would not be able to get a refund if the deadline for the refund application is missed. Moreover, when filing the return of an estate, attention to detail is needed to be done correctly to ensure the election is properly requested.

The Burton Law Firm, PC has several certified special in Estate Planning, Trust and Probate Law and Taxation Law, and can make sure proper planning is used to take advantage of your portability election and related tax mitigation strategies.

All 916-822-8700 today to schedule a consult or email