Portability was a game-changer for estate planners, but the increase in the exemption amount in recent years has obviated the need to make a portability election in many cases. With the pending sunset of the 2017 Tax Cuts and Jobs Act (TCJA) on December 31, 2025, the estate tax exemption amount will be cut in half, subjecting a larger pool of clients to estate tax. Preparing for the sunset requires refreshing our understanding of the estate tax portability rules and how to effectively utilize them for our clients.

I. What is Portability?

Portability became law on a temporary basis, on December 17, 2010, when President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Then, on January 2, 2013, President Obama signed the American Taxpayer Relief Act (“ATRA”), which made portability, and several other notable estate, gift and generation skipping transfer tax provisions, permanent.

The basic premise behind the enactment of portability is that:

[w]ithout this portability provision, spouses are often required to retitle assets into each spouse’s separate name and create complex trusts in order to allow the first spouse to die to take full advantage of his or her exclusion. Depending upon the nature of the couple’s assets, such a division may not be possible. Such a division also has significant consequences under property law and often is not consistent with the way in which the married couple would prefer to handle their financial affairs. Portability would obviate the need for such burdensome planning.[1]

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (“TCJA”), which doubled the basic exclusion amount from $5,000,000 to $10,000,000 (indexed for inflation from) for the estates of decedents dying and gifts made after December 31, 2017, and before January 1, 2026. Beginning January 1, 2026, the basic exclusion amount will be cut in half and revert to the value calculated under ATRA (estimated to be about $7,000,000 per person).

The portability rules are found within IRC §2010 and Treas. Reg. §§ 20.2010-1, -2 and -3 all of which were made permanent with the passage of ATRA. In simple terms, portability provides that if the estate of the deceased spouse plus their adjusted taxable lifetime gifts does not exceed the basic exclusion amount, then the surviving spouse can combine the deceased spouse’s remaining basic exclusion amount with the survivor’s basic exclusion amount and subsequently use the combined amount to shelter the value of the survivor’s assets from future estate tax and gift tax.

While portability may reduce the need to let the tax tail wag the dog for small to moderate-sized estates, it does provide a layer of planning and administrative complexity that did not previously exist and is not quite the estate planning panacea that the Treasury imagined.

II. A Few Definitions

Applicable Credit Amount – refers to the allowable credit against estate tax imposed by IRC §2001 and gift tax imposed by IRC §2501. The applicable credit amount equals the amount of the tentative estate tax that would be determined under IRC §2001(c) if the amount on which the tentative tax is to be computed were equal to the applicable exclusion amount. The applicable credit amount is determined by applying the unified rate schedule in IRC §2001(c) to the applicable exclusion amount.[2]

Applicable Exclusion Amount – equals the sum of the basic exclusion amount and the deceased spousal unused exclusion amount.[3]

Basic Exclusion Amount – begins at $10,000,000 for decedent’s dying in 2011, and thereafter is indexed for inflation each calendar year in multiples of $10,000.[4]

Deceased Spousal Unused Exclusion (“DSUE”) Amount – is the unused portion of a deceased spouse’s applicable exclusion amount to the extent this amount does not exceed the basic exclusion amount in effect in the year of the decedent’s death.[5]

Last Deceased Spouse – the most recently deceased individual who, at that individual’s death after December 31, 2010, was married to the surviving spouse.[6]

III. Making the Portability Election

Eligibility and Timing

Only the estates of U.S. citizens or residents are eligible to make a portability election. A portability election cannot be made on behalf of the estate of a nonresident, non-U.S. citizen decedent, regardless of whether the surviving spouse is a U.S. citizen or legal resident.[7]

The executor or administrator of the estate of a decedent (survived by a spouse) who is appointed, qualified, and acting within the United States within the meaning of IRC §2203 (an “appointed executor”) may file the estate tax return on behalf of the decedent’s estate and elect portability of the decedent’s DSUE amount.  An appointed executor also may elect out of portability.[8]

If there is no appointed executor, any person in actual or constructive possession of any property of the decedent (a “non-appointed executor”) may file the estate tax return on behalf of the estate of the decedent and elect portability of the decedent’s DSUE amount, or the non-appointed executor may elect out of portability.  A portability election made by a non-appointed executor cannot be superseded by a contrary election made by another non-appointed executor of that same decedent’s estate (unless the other non-appointed executor is the successor of the non-appointed executor who made the election).[9]

To make the portability election of the DSUE amount, the executor of the decedent’s estate must timely file a United States Estate (and Generation-Skipping Transfer) Tax Return (“Form 706”). The due date of the Form 706 required to elect portability is nine months after the decedent’s date of death, including extensions, and the estate may apply for an automatic six-month extension of time to file. [10]  Upon the timely filing of a complete and properly prepared Form 706, the executor of the estate of a decedent (who is survived by a spouse) will have elected portability of the decedent’s DSUE amount.[11]

For estates that have no estate tax return filing obligation because the gross value of the estate does not exceed the decedent’s applicable exclusion amount, and the only reason for filing Form 706 is to make the portability election, Rev. Proc. 2022-32 allows Form 706, , to be filed within 5 years of the decedent’s date of death, in order to make a portability election.

Practice Tip: If you have decided that making the portability election in an otherwise non-taxable estate is the best course of action for your clients, , consider drafting your estate planning documents to make the portability election a mandatory duty of the executor or trustee and whether the estate or the surviving spouse will pay the expense.

Form 706 Preparation Requirements

Taxable Estates: As part of ATRA, a new Part 6—Portability of Deceased Spousal Unused Exclusion (DSUE) was added to Form 706. For an estate that requires filing Form 706 because the value of the gross estate exceeds the basic exclusion amount, the only action required to elect portability of the DSUE amount is to file a timely and complete Form 706, including a complete Part 6. Besides providing the mechanism for making the portability election, taxpayers use Part 6 to opt out of electing to transfer any DSUE amount to a surviving spouse in Section A and account for any DSUE amount received from a predeceased spouse in Section D. The portability election becomes irrevocable once the due date of Form 706, including extensions granted, has passed.[12]

Non-Taxable Estates:  If a Form 706 is not required because the value of the gross estate does not exceed the basic exclusion amount, the executor still must file a complete Form 706 to make the portability election unless the special rule of Treas. Reg. §20.2010-2(a)(7)(ii) applies.  Under the special rule, executors of estates who are filing Form 706 only to elect portability of the DSUE amount, are not required to report the value of property eligible for the marital deduction under IRC §2056 or §2056A or the charitable deduction under IRC §2055. Instead, the value of assets being reported under the special rule is estimated, aggregated, and reported as a lump sum on Form 706.

The special rule does not apply if:

1. The value of the property relates to, affects, or is needed to determine, the value passing from the decedent to a recipient other than the surviving spouse or charity;

2. The value of the property is needed to determine the estate’s eligibility for the provisions of IRC §2032 (alternate valuation); §2032A (valuation of farm property); §6166 (installment payment of estate tax); or another provision of the Internal Revenue Code or Treasury Regulations;

3. Less than the entire value of an interest in property includible in the decedent’s gross estate is marital deduction property or charitable deduction property; or

4. A partial disclaimer or partial qualified terminable interest property (QTIP) election is made with respect to a bequest, devise, or transfer of property includible in the gross estate, part of which is marital deduction property or charitable deduction property.[13]

If the special rule applies and property is reported on Form 706 Schedules A, B, C, D, E, F, G, H or I, the executor must calculate his or her best estimate of the value using the “Table of Estimated Values” .[14] Although the property is described and itemized on Form 706 as usual, the executor does not include the estimated value on the line corresponding to the schedule on which the property is being reported.  Instead, the total estimated value of the assets subject to the special rule is entered on line 10 of Part 5 – Recapitulation Schedule.

As applies to all other values reported on Form 706, estimates of the value of property under the special rule must result from the executor’s exercise of due diligence and are subject to penalties of perjury.[15]

Special Rule Examples:

The following examples illustrate the application of the special rule of Treas. Reg. §20.2010-2(a)(7)(ii). In each special rule example, assume that 1) Husband (H) dies in 2023 when the basic exclusion amount is $12,920,00 and is survived by his Wife (W); 2) both H and W are U.S. citizens; 3) H’s gross estate does not exceed his basic exclusion amount plus adjusted taxable gifts; and 4) H’s executor (E) timely files Form 706 solely to make the portability election.

Example (1) – All Assets to the Surviving Spouse

The assets includible in H’s gross estate consist of a parcel of real property and bank accounts held jointly with W with rights of survivorship, a life insurance policy payable to W, and a survivor annuity payable to W for her life. H made no taxable gifts during his life.

E timely files a Form 706 on which these assets are identified on the proper schedule but in accordance with Treas. Reg. §20.20.10-2(a)(7)(ii), E provides no date of death value information for the assets on Form 706. To establish the estate’s entitlement to the marital deduction in accordance with Treas. Reg. §20.2056(a)-1(b) (except with regard to establishing the value of the property) and the instructions for the estate tax return, E includes with the estate tax return evidence to verify the title of each jointly held asset to confirm that W is the sole beneficiary of both the life insurance policy and the survivor annuity, and to verify that the survivor annuity is going to be paid exclusively to W for W’s life.  Finally, E certifies on Form 706, E’s best estimate of the fair market value of H’s gross estate determined by using the Table of Estimated Values and exercising due diligence. The Form 706 is considered complete and properly prepared, and E has elected portability.[16]

Example (2) – Assets to QTIP and Non-Probate Assets to Children

H’s will, duly admitted to probate and not subject to any proceeding to challenge its validity, provides that H’s entire estate is distributed to a QTIP trust for W. The non-probate assets includible in H’s gross estate consist of a life insurance policy payable to H’s children from a prior marriage and H’s individual retirement account (IRA) payable to W. H made no taxable gifts during his life.

E files a Form 706 on which all the assets includible in H’s gross estate are identified on the proper schedule. In the case of the probate assets passing to the QTIP and the IRA, no information is provided to support the date of death value in accordance with Treas. Reg. §20.2010-2(a)(7)(ii). E makes a QTIP election by completing Form 706 Schedule M, attaches a copy of H’s will creating the QTIP Trust, and describes each asset and its ownership to establish the estate’s entitlement to the marital deduction in accordance with the instructions for Form 706 and Treas. Reg. §20.2056(a)-1(b).  In the case of the life insurance policy payable to H’s children, all the regular Form 706 return requirements, including reporting and establishing the fair market value of the asset using Form 712 apply. Finally, E certifies on Form 706 his best estimate of the fair market value of H’s assets subject to the special rule determined by using the Table of Estimated Values and exercising due diligence. The estate tax return is considered complete and properly prepared, and E has elected portability.[17]

IV. Computing the DSUE Amount

The General Rule

The DSUE amount of a decedent with a surviving spouse is the lesser of 1) the decedent’s basic exclusion amount in the year of death or 2) the excess of the decedent’s applicable exclusion amount over the sum of the amount of the taxable estate and the amount of the adjusted taxable gifts of the decedent, which together is the amount on which the tentative tax on the decedent’s estate is determined.[18]

Example (1) – General Rule

In 2002, having made no prior taxable gifts, H makes a taxable gift valued at $1,000,000 and reports the gift on a timely-filed gift tax return. H dies on September 1, 2023, with a $4,000,000 estate and is survived by W. E timely files Form 706 and elects portability.

By completing Form 706 Part 6 Section D, E computes H’s DSUE amount to be $7,920,000 (the lesser of H’s $12,920,000 basic exclusion amount in 2023, or the excess of H’s $12,920,000 applicable exclusion amount over the sum of the $4,000,000 taxable estate and the $1,000,000 amount of adjusted taxable gifts).

Practice Tip: Make sure your estate planning intake form includes a question about whether the client had a spouse who died on or after January 1, 2011, and, if so, whether an estate tax return was filed for the deceased spouse. The information will be critical in determining whether a portability election was made and whether the surviving spouse has any DSUE amount that should be considered in their current estate planning.

The “Last Deceased Spouse” Limitation on the DSUE Amount

If more than one spouse predeceases a surviving spouse, the DSUE amount currently available for use by the surviving spouse is limited to the lesser of the basic exclusion amount or the unused exclusion amount of the “last deceased spouse.”[19]  The last deceased spouse is the most recently deceased individual who, at that individual’s death, was married to the surviving spouse.[20]  The last deceased spouse limitation applies whether or not the last deceased spouse had any unused exclusion amount and whether or not the estate makes a timely portability election allowing the surviving spouse to use the DSUE amount.  If the executor of the last deceased spouse’s estate did not make a portability election, the surviving spouse’s estate has no DSUE amount to be included in determining the survivor’s applicable exclusion amount.[21]

A decedent is the last deceased spouse of a surviving spouse even if, on the date of the death of the surviving spouse, the surviving spouse is married to another (then-living) individual. If a surviving spouse marries again and that marriage ends in divorce or an annulment, the subsequent death of the divorced spouse does not end the status of the prior deceased spouse as the last deceased spouse of the surviving spouse. The divorced spouse, not being married to the surviving spouse at death, is not the last deceased spouse.[22]

Practice Tip: Consider filing Form 706 to make a portability election, even for smaller estates, to ensure surviving spouse has DSUE available in the event their assets grow substantially.

Multiple Deceased Spouses

A special rule applies to compute the DSUE amount included in the applicable exclusion amount of a surviving spouse who previously applied the DSUE amount from one or more deceased spouses to taxable gifts. If a surviving spouse has applied the DSUE amount of one or more last deceased spouses to the surviving spouse’s transfers during life, and if any of those last deceased spouses is different from the surviving spouse’s last deceased spouse at the time of the surviving spouse’s death, then the DSUE amount to be included in determining the applicable exclusion amount of the surviving spouse at the time of the surviving spouse’s death is the sum of 1) the DSUE amount of the surviving spouse’s last deceased spouse as described above and 2) the DSUE amount of every other deceased spouse of the surviving spouse, to the extent that the DSUE amount was applied to one or more lifetime taxable gifts of the surviving spouse.[23]  The following example illustrates the application of the multiple deceased spouse rule.

Example (1) – Two Deceased Spouses with Partial Use of DSUE Amount

Husband 1 (H1) dies on January 15, 2011, survived by Wife (W). Neither had made any taxable gifts during H1’s lifetime. H1’s executor elects portability of H1’s $5,000,000 DSUE amount by timely filing Form 706. On December 31, 2011, W makes taxable gifts to her children valued at $2,000,000. W reports the gifts on a timely filed gift tax return and W is deemed to have applied $2,000,000 of H1’s DSUE amount to her taxable gift and owes no gift tax.[24]  At the end of 2013, W has an applicable exclusion amount of $8,430,000 ($3,000,000 of H1’s remaining DSUE amount plus W’s own $5,430,000 basic exclusion amount).  After the death of H1, W marries Husband 2 (H2). H2 dies on June 1, 2022, having made no taxable gifts during his life. H2’s executor elects portability of H2’s DSUE amount on a timely filed Form 706, which calculated to be $12,060,000. W then dies on October 1, 2023, having made no lifetime taxable gifts except the $2,000,000 gift made on December 31, 2011.

The DSUE amount to be included in determining the applicable exclusion amount available to W’s estate is $14,060,000, calculated by adding the $12,060,000 DSUE amount of H2 and the $2,000,000 DSUE amount of H1 that was applied by W to W’s 2011 taxable gifts. Thus, W’s applicable exclusion amount is $26,980,000 (W’s basic exclusion amount of $12,920,000 plus the $14,060,000 DSUE amount).[25]

Example (2) – Two Deceased Spouses with Full Use of DSUE Amount

Assume the same facts as Example (1) except that on December 31, 2011, W makes a $5,000,000 taxable gift (rather than a $2,000,000 gift) to her children. Pursuant to Treas. Reg. §25.2505-2(b), W is deemed to have applied $5,000,000 of H1’s DSUE amount to the taxable gift, and she owes no gift tax. At the end of 2013, W has an applicable exclusion amount of $5,340,000 ($0 of H1’s remaining DSUE amount plus W’s own $5,340,000 basic exclusion amount). After the death of H1, W marries Husband 2 (H2) who dies on June 1, 2022. H2’s executor elects portability of H2’s DSUE amount by timely filing Form 706, calculated on H2’s estate tax return to be $12,060,000. W dies on October 1, 2023, having made no lifetime taxable gifts except the $5,000,000 gift to her children on December 31, 2011.

The DSUE amount included in determining the applicable exclusion amount available to W’s estate is $17,060,000, determined by adding the $12,060,000 DSUE amount of H2 and the $5,000,000 DSUE amount of H1 that was applied by W to W’s 2011 taxable gifts. Thus, W’s applicable exclusion amount when she dies in 2023 is $29,980,000 (W’s basic exclusion amount of $12,920,000 plus the $17,060,000 DSUE amount).[26]

Practice Tip for the Enterprising Widow(er):  Extending the result of Example (2), in 2024 it would be possible for a person who outlives two spouses to shelter $40,830,000 ($13,610,000 x 3), three spouses $54,440,000 ($13,610,000 x 4), four spouses $68,050,000 ($13,610,000 x 5), etc. from estate tax by maximizing lifetime gifts using the deceased spouse’s DSUE amount and the automatic DSUE gift tax allocation rules of Treas. Reg. §25.2505-2(c).

Practice Tip:  If a client is remarrying, and he or she is the beneficiary of a deceased spouse’s DSUE amount, consider making lifetime gifts of the DSUE amount before and during the subsequent marriage to avoid losing its value upon the death of the subsequent spouse. Also, consider whether the value of the DSUE amount should be disclosed, and the use of the DSUE amount provided for in a premarital agreement.

V. Effective Date of the DSUE Amount and Examinations

Effective Date of the DSUE Amount

A properly made portability election is effective as of the date of the decedent’s death. The decedent’s DSUE amount is included in the applicable exclusion amount of the surviving spouse under IRC §2010(c)(2) and will apply to transfers made by the surviving spouse at any time after the decedent’s death. However, the decedent’s DSUE amount will not be included in the applicable exclusion amount of the surviving spouse, even if the surviving spouse had made a transfer in reliance on the availability or computation of the decedent’s DSUE amount:

1. If the executor of the decedent’s estate supersedes the portability election by filing a subsequent estate tax return under Treas. Reg. §20.2010-2(a)(4) that elects out of portability; or

2. To the extent that the DSUE amount subsequently is reduced by an IRS valuation adjustment or the correction of an error in calculation; or

3. To the extent that the surviving spouse cannot substantiate the DSUE amount claimed on the surviving spouse’s gift or estate tax return.[27]

IRS Examination of Returns

For purposes of determining the DSUE amount available to the surviving spouse, the IRS may examine returns for each of the surviving spouse’s deceased spouses whose DSUE amount is claimed to be included in the surviving spouse’s applicable exclusion amount, regardless of whether the period of limitations has expired for any such return.[28]  The IRS’s authority to examine returns of a deceased spouse applies with respect to each transfer by the surviving spouse to which a DSUE amount is or has been applied.[29]  Upon examination, the IRS may adjust or eliminate the DSUE amount reported on such a return; however, the IRS may assess additional tax on that return only if that tax is assessed within the original period of limitations on assessment under IRC §6501.[30]  The period of limitations on assessment generally falls into one of three time periods:

1. Three years from the date of filing for normal deficiencies.[31]

2. Six years from the date of filing, if the taxpayer omits, from a Form 706 or Form 709, more than 25% of the gross estate’s value or the total amount of gifts.[32]

3. No limit in the case of fraudulent returns, returns intentionally designed to evade tax, or if no return is filed.[33]

The possibility that the IRS could open a years-old (or even decades-old) estate tax or gift tax return to assess the sufficiency of asset valuations used in making a portability election or reporting lifetime gifts of a DSUE amount is quite alarming. Even though the examination of most of these returns will not result in the imposition of additional tax because the original period of limitations on assessment will have expired, the age of the returns themselves will make it difficult to defend any value (even estimated values) used to make the portability election. Records are destroyed, memories fade, and the professionals engaged in the original transaction may no longer be practicing.

If the IRS adjusts the value of an asset many years later, there is a risk that our clients (or their heirs) could end up paying estate and/or gift tax on what were originally believed to be non-taxable transactions. This could also leave attorneys exposed to liability. Imagine telling a client, or their heirs, that the IRS adjusted their mother’s DSUE amount calculation from $5,000,000 to $4,000,000 (not difficult to imagine), and now they owe an additional $400,000 in estate tax because the records used to determine estimated assets values reported on Form 706 prepared twelve years ago, were destroyed, in accordance with office policy, six years after preparing the return.

Practice Tip:  In addition to advising the surviving spouse to indefinitely retain a copy of the DSUE calculation (and the entire 706 if available) to substantiate the DSUE amount received from a deceased spouse, perhaps best practice dictates that all gift and estate tax returns and corresponding files be retained by the attorney or CPA until the period of assessments expires on the estate of the second-to-die spouse (generally three years after the death of the surviving spouse).

Practice Tip:  Consider putting a clause in your estate planning documents absolving the fiduciary (and his or her advisors) from the long-term liability of preparing the portability election by directing he or she has no obligation to maintain documents supporting the calculation of, or asset values used, in preparing the portability election.  Also, consider directing the fiduciary to deliver a copy of the portability election and all supporting documentation to the surviving spouse.

VI. The Anti (and Anti-Anti) Clawback Rules

Changes in the basic exclusion amount (or its sunset on December 31, 2025) that occur between the date of the donor’s gift and the date of the donor’s death may cause the basic exclusion amount allowable on the date of a gift to exceed the basic exclusion amount allowable on the date of death.  What happens in this case? Does the previous large gift cause the claw-back of the gift and additional estate tax? The answer is found in the anti-clawback regulations found in Treas. Reg. §20.2010-1(c) which became effective on November 26, 2019, almost two years after passage of the TCJA.

The Anti-Clawback Regulations

Although expressed in terms of the credit allowed in computing the gift and estate tax, Treas. Reg. §20.2010-1(c) provides that if no gift tax was due at the time a gift was made (either because the DSUE amount was used or the donor had available exclusion amount), then no estate tax is due even though the exclusion amount at the time of the donor’s death is less than the value of the previously made gift.  If the value of gifts previously made does not exceed the donor’s applicable exclusion amount at the time of the donor’s death, then the anti-clawback regulations do not apply. Here are a few examples to illustrate the application of this rule.

Example – Lifetime Gifts Exceed Basic Exclusion Amount

Individual A (never married) made cumulative lifetime gifts of $9,000,000, all of which were sheltered from gift tax by his basic exclusion amount allowable at the time the gifts were made. A then dies in 2026 when the basic exclusion amount is $7,200,000 (because of the sunset). Since the total of the amounts allowable as a credit in computing the gift tax payable on A’s gifts (based on the $9,000,000 basic exclusion amount used to determine those credits) exceeds the allowable credit on the $7,200,000 basic exclusion on A’s date of death, the anti-clawback rule applies and no additional estate tax is due on the “excess” $1,800,000 gift.[34]

Practice Tip: If the current exclusion amount sunsets on December 31, 2025, consider using the 5-year rule of Rev. Proc. 2022-32 to make a late portability election to “lock” in the deceased spouse’s elevated TCJA exclusion amount.

The Anti-Anti-Clawback Regulations

To prevent taxpayers from making “completed” gifts during life but retaining an interest in the gifted property in hopes of taking advantage of the higher basic exclusion amount before December 31, 2025, proposed Treas. Reg. §20.2010-1(c)(3) excludes the following gifts from the favorable anti-clawback provisions and includes the value of the affected assets in the estate of the decedent at full fair market value using the decedent’s basic exclusion amount available for the year of death rather than the previously higher TCJA basic exclusion amount.

1. The transfer of property in which the decedent retained the possession or enjoyment of such property, the right to the income from such property, or the right to designate the persons who should possess or enjoy the property or the income (IRC §2036).

2. The transfer of property where the possession or enjoyment of the property can only be obtained by surviving the decedent (IRC §2037).

3. The transfer of property where the decedent has retained a reversionary interest in such property, and the value of such reversionary interest immediately before the decedent’s death exceeds 5% of the value of such property (IRC §2037).

4. The transfer of property where the decedent has the power to alter, amend, revoke, or terminate such transfer (IRC §2038).

5. The value of life insurance proceeds for policies on the decedent’s life in which the decedent is the beneficiary, as well as for policies on the decedent’s life in which the decedent possessed any of the incidents of ownership regardless of the beneficiary of the policy (IRC §2042).

6. The transfer of a legally binding promissory note that has not been satisfied at the transferor’s time of death (Rev. Rul. 84-25).

7. The transfer of certain interests in corporations or partnerships that are subject to the special valuation rules of IRC §2701 and §2702.[35]

Conclusion

Effective estate tax portability planning requires a thorough understanding of the rules and strategically applying them to maximize their estate and gift tax benefits. Understandably, some of the nuances have been shelved since the enactment of the TCJA as the elevated basic exclusion amount has eliminated the estate tax for most estates. Given the pending sunset of the current basic exclusion amount, now is the time to sharpen our portability skills, as we may be calling on them once again to help our clients preserve and transfer wealth in the most tax-efficient manner possible.

[1] General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals, Department of the Treasury, p. 123.

[2] IRC §2010(c)(1), Treas. Reg. §20.2010-1(d)(1).

[3] IRC §2010(c)(2), Treas. Reg. §20.2010-1(d)(2).

[4] IRC §2010(c)(3), Treas. Reg. §20.2010-1(d)(3).

[5] IRC §2010(c)(4), Treas. Reg. §20.2010-1(d)(4).

[6] Treas. Reg. §20.2010-1(d)(5).

[7] IRC §2010(a); Treas. Reg. §20.2010-2(a)(5).

[8] Treas. Reg. §20.2010-2(a)(6)(i).

[9] Id. See, also Treas. Reg. §20.6018-2 for additional rules relating to persons permitted to file the estate tax return.

[10] Treas. Reg. §20.2010-2(a).

[11] Treas. Reg. §20.2010-2(a)(2).

[12] Treas. Reg. §20.2010-2(a)(4).

[13] Treas. Reg. §20. 2010-2(a)(7)(ii)(A)(1) through (4).

[14] Treas. Reg. §20.2010-2(a)(7)(B).  See also, instructions to Form 706 page 16.

[15] Id.

[16] Treas. Reg. §20.2010-2(a)(7)(ii)(C) Ex. 1.

[17] Treas. Reg. §20.2010-2(a)(7)(ii)(C) Ex. 2.

[18] IRC § 2010(c)(4).

[19] Id.

[20] Treas. Reg. §20.2010-1(e)(5).

[21] Treas. Reg. §20.2010-3(a)(2).

[22] Treas. Reg. §20.2010-3(a)(3).

[23] Treas. Reg. §20.2010-3(b)(1).

[24] Treas. Reg. §25.2502-2(b).

[25] Treas. Reg. §20.2010-3(b)(2).

[26] Id.

[27] Treas. Reg. §20.2010-3(c)(1).

[28] IRC §20.2010-3(d).

[29] Id.

[30] Id.

[31] IRC §6501(a).

[32] IRC §6501(e).

[33] IRC §6501(c).

[34] Treas. Reg. §20.2010-1(c)(2).

[35] Prop. Treas. Reg. §20.2010-1(c)(3)(i)(A) through (D).

Nathan R. Olansen, Midgett Preti Olansen PC

Nathan is the Managing Shareholder of the law firm Midgett Preto Olansen PC, with a practice focused on estate planning, probate and trust administration, asset protection, and individual and entity tax planning.  He is a former President of the Trusts & Estates Section of the Virginia State Bar, the Hampton Roads Estate Planning Council, and the Hampton Roads Tax Forum.  Nathan is listed across four categories in Best Lawyers in America®: Trusts and Estates; Tax Law; Litigation – Trusts and Estates; and Litigation and Controversy – Tax. He is licensed to practice law in Virginia and North Carolina, and he is also a certified public accountant.