What is Your Portability IQ?


Portability, a new concept introduced by the December 2010 amendment to the Estate Tax, is a topic that we all need to learn more about.

Jamie Held provided this summary of portability:

In general, portability allows a surviving spouse to use a deceased spouse’s unused exemption amount in addition to his/her own $5 million exclusion for taxable transfers made during life or at death.  Consequently, a couple may ultimately transfer a combined $10 million before being subject to federal estate or gift taxes.

. . . .

In order for a surviving spouse to preserve the ability to use the deceased spouse’s unused exemption amount, an election must be made. The election is made on a timely filed federal estate tax return (Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return).

. . . .

Be aware that the first tax returns electing portability are due this quarter.  This applies to the surviving spouse of a decedent dying in early 2011 who wishes to preserve the deceased spouse’s unused exemption.

The entire post is available at Epilawg.

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