Source: http://communityfound.giftlaw.com/?pageID=39&docID=1099
Timestamp: 2020-02-21 04:57:45
Document Index: 158360766

Matched Legal Cases: ['§ 301', '§ 2010', '§ 6018', '§ 20', '§ 301', '§ 2001', '§ 301']

Tax News - Private Letter Ruling | Community Foundation of Mendocino County (CFMC)
Decedent died and was survived by Spouse. Decedent's estate was not required under Sec. 6018(a) to file an estate tax return. When decedent died, there was an unused applicable exclusion amount. Spouse failed to file for a portability election in a timely manner, which would have allowed Spouse to take into account the deceased spouse unused exemption (DSUE) amount. Decedent's estate requested an extension of time to make a portability election under Reg. 301.9100-3.
The transfer of the taxable estate of a decedent is subject to tax under Sec. 2001(a). Section 2010(a) provides for an applicable credit amount for every decedent. Section 2010(c) allows spousal portability of a decedent's unused applicable exclusion amount. Under Sec. 2010(c)(5)(A), the DSUE may not be taken into account unless the deceased spouse's estate files an estate tax return making the election. The due date for the filing of the estate tax is set at nine months after the decedent's date of death under Reg. 20.2010-2(a)(1). The estate may, however, file for an extension of time under Reg. 301.9100-3 to make a portability election if the estate was not required under Sec. 6018(a) to file an estate tax return. Regulation 301.9100-1(c) gives the Commissioner discretion to grant a reasonable extension of time. The Commissioner will grant relief under Reg. 301.9100-3 if it is established that the taxpayer acted reasonably and in good faith and that granting the relief will not prejudice the interests of the government. Here, Decedent's estate provided satisfactory representations regarding its reasons for failing to submit a timely election. Therefore, the Service granted an extension of 120 days for Decedent's estate to make the portability election.
PLR 202002001 DSUE Portability Election Extension Granted
1/10/2020 (8/19/2019)
This letter responds to a letter dated December 17, 2018, submitted on behalf of Decedent's estate, requesting an extension of time pursuant to § 301.9100-3 of the Procedure and Administration Regulations to make an election under § 2010(c)(5)(A) of the Internal Revenue Code (a "portability" election) to allow Decedent's surviving Spouse to take into account that Decedent's deceased spousal unused exclusion (DSUE) amount.
Decedent died on Date, survived by Spouse. It is represented that based on the value of Decedent's gross estate and taking into account any taxable gifts, Decedent's estate is not required under § 6018(a) to file an estate tax return (Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return). It is further represented that there is an unused portion of Decedent's applicable exclusion amount and that a portability election is required to allow Spouse to take into account that amount (the "DSUE" amount). A portability election is made upon the timely filing of a complete and properly prepared estate tax return, unless the requirements for opting out are satisfied.
See § 20.2010-2(a)(2) of the Estate Tax Regulations. For various reasons, an estate tax return was not timely filed and a portability election was not made. After discovery of this, Decedent's estate submitted this request for an extension of time under § 301.9100-3 to make a portability election.
Section 2010(c)(4) defines the DSUE amount to mean the lesser of (A) the basic exclusion amount, or (B) the excess of — (i) the applicable exclusion amount of the last deceased spouse of the surviving spouse, over (ii) the amount with respect to which the tentative tax is determined under § 2001(b)(1) on the estate of such deceased spouse.
Information, affidavits, and representations submitted on behalf of Decedent's estate explain the circumstances that resulted in the failure to timely file a valid election. Based solely on the information submitted and the representations made, we conclude that the requirements of §§ 301.9100-1 and 301.9100-3 have been satisfied. Therefore, we grant an extension of time of 120 days from the date of this letter in which to make the portability election. The election should be made by filing a complete and properly prepared Form 706 and a copy of this letter, within 120 days from the date of this letter, with the Cincinnati Service Center, at the following address: Department of the Treasury, Internal Revenue Service Center, Kansas City, MO 64999. For purposes of electing portability, a Form 706 filed by Decedent's estate within 120 days from the date of this letter will be considered to be timely filed.
By: Melissa C. Liquerman
Chief, Branch 4
CFMC Newsletter for Professional Advisors