ACTEC Gives Recommendations for Implementation of Existing Tax Law

The American College of Trust and Estate Council sent Congress a Report on November 2, 2011 that contains “eight recommendations to improve implementation of existing estate, gift and generation-skipping tax laws.” Brief overviews of the eight recommendations are below:

1. Automatic Lifetime QTIP Election: “A proposal to make the QTIP election automatic for inter-vivos transfers of property interests meeting QTIP requirements, with an election out for those taxpayers not desiring a marital deduction.”
2. Granting the IRS Authority to Extend the Period for Making the Gift Tax QTIP Election: “A proposal to extend relief to taxpayers who fail to timely make a gift tax QTIP election comparable to the relief already provided to executors who fail to make a timely QTIP election on the estate tax return.”
3. Allowing a Martial Deduction for Post-Mortem Reformations of Marital Property Interests: “A proposal to permit post-mortem reformations of marital interests to qualify for the marital deduction in order to grant U.S. citizen surviving spouses the same relief currently provided to non-citizen spouses.”
4. Aggregation of Deceased Spousal Unused Exclusion Amounts: “A proposal to permit aggregation of deceased spousal unused exclusion amount.”
5. Privity—“Requests for clarity as to privity.”
6. Requirement to File Estate Tax Return: “A proposal to permit the availability of portability to be demonstrated by an attachment to the decedent’s final Form 1040, not only by the filing of an estate tax return.”
7. Claw Back Issue “A request that Congress clarify whether a reduction in the basic exclusion amount could result in additional estate tax if the taxpayer had previously made taxable gifts.”
8. Election Out of Taxable Terminations: “A proposal to permit an executor of a deceased beneficiary’s estate to elect out of taxable termination treatment by including the value of the trust assets in the beneficiary’s gross estate for federal estate tax purposes.”

The American College of Trust and Estate Counsel: Eight Recommendations to Improve Implementation of Existing Tax Laws, ACTEC, Nov. 2, 2011.