On July 8, 2022, the Internal Revenue Service released Revenue Procedure 2022-32, which provides a simplified method for certain estates to make a late portability election. A portability election allows a surviving spouse to apply a decedent’s unused exclusion (DSUE) amount to the surviving spouse’s own transfers during life and at death.
Revenue Procedure 2022-32 expressly supersedes Revenue Procedure 2017-34, which allowed an estate that wasn’t required to file an estate tax return to make a late election through the second anniversary of death and updates the period within which the estate of a decedent may make the portability election to on or before the fifth anniversary of the decedent’s date of death.
The simplified method is available to the executor of the estate if: (1) the decedent died after Dec. 31, 2010, (2) the decedent was a citizen or resident on date of death, (3) the decedent’s estate isn’t required to file an estate tax return (that is, the decedent’s estate is below the filing threshold) and (4) the estate didn’t in fact file a timely estate tax return.
Revenue Procedure 2022-32 provides the chance to revisit previously omitted election opportunities for portability. If you have a spouse that died within the last five years and did not file for portability, you should re-consider whether filing makes sense in your situation. If there is any doubt, filing is almost certainly the answer, but please reach out to an advisor who could provide individual guidance.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
