Less than 3,300 estates will owe federal estate taxes this year (the smallest number in over seventy-five years), but portability has caused an increase in the number of federal estate tax returns filed this year—even if the estate owes no tax. Administrators have a nine month deadline to file returns in order to preserve portability, and many clients likely question why a federal estate tax return is required when no federal estate taxes are owed. Though estate planners are likely finding it difficult to answer the questions of these curious clients, one thing is for certain—the number of federal estate tax returns filed this year due to portability preservation will likely keep estate planners and the IRS busy for quite some time.
See Roberton Williams, The Coming Flood of Estate Tax Returns, Forbes, Nov. 30, 2011.
Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.
