Showing posts from October, 2017

IRS Extends Deadline for Widows' Election of Estate Tax Portability

If your spouse died since 2011, the IRS earlier this year extended the timeframe you have to make a "portability" election by filing a Form 706 Estate Tax Return, until the later of either January 2, 2018 or the second anniversary of the decedent's date of death.  See Revenue Procedure 2017-34.

Here's what that means and why it is important. Remember the "fiscal cliff" issue from a few years back?  The federal estate tax used to have a sunset provision.  When that expired, Congress did not update it right away, but debated what to do, before finally enacting a law that made the estate tax permanent (not sunsetting). The estate tax exclusion, the threshold amount of wealth below which you would not owe any estate tax, was set at $5 million, with an adjustment each year for inflation. (For 2017 that number is $5.49 million, and the IRS has announced it will go up to $5.6 million for 2018.  For ease of reference, I'm going to stick to the round number $5 …