The IRS has extended the deadline to file estate tax returns with a portability election to benefit the surviving spouses of married individuals who died during the first half of 2011

1. IRS Extends “Portability” Filing Deadline
for Surviving Spouses
The IRS has extended the deadline to file estate tax returns with a portability election to
benefit the surviving spouses of married individuals who died during the first half of 2011.
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2.  The last two years have been tumultuous for purposes of NY
estate planning, just as they have for the economy, politics, war
and peace, and many other things. Nor is there any reason to
believe that the ups and downs are over, as we move deeper into
an election year and there’s no telling where the nation will go
either in terms of who wins the elections or how Congress and
the president will move for the rest of the year.
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LAW OFFICE OF DAVID PARKER BLOG
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3.  One sign of this, and of the fact that the new tax laws are not
well known by the public, is that the IRS has extended the
deadline for the estate tax “portability” election for some
surviving spouses. Accounting Today has the story. If a spouse
died within the first six months of 2011, and the estate of the
decedent had a value of less than $5 million, even if the
executor of the estate didn’t file the return within the first 9
months, they have all 15 months to file. However, to comply
they need to properly file both the extension Form 4768 and the
estate tax form itself, Form 706. Effectively, this means that the
first 2011 portability elections become due on April 2, 2012.
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4.  “Portability” refers to the ability of a surviving spouse to
receive and use the unused portion of the decedent’s estate tax
and gift tax exemption. Under 2011 law, the exemption is $5
million, and that means that for a surviving spouse using
portability the combined exemption would be $10 million. This
applies to both estate and gift taxes, so any portion already used
by the decedent as exemption from gift taxes would not be
transferred to the surviving spouse.
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5.  Portability doesn’t happen automatically, though, and so proper
filing is required and time is of the essence. For those with
larger estates, it can make a big difference in terms of New
York asset protection. The IRS probably wouldn’t be making
the extension of time available if it believed people understood
the new rules properly. It’s worth getting the word out, and
making certain that your own planning takes advantage of this
feature, for that reason.
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LAW OFFICE OF DAVID PARKER BLOG
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6. Law Office of David Parker
Estate Planning and Elder Law
 www.parkertrustlaw.com