Portability Election

The portability election allows spouses to use the unused amount of their deceased spouse’s lifetime exclusion amount ($5.12 million for 2012) if the estate of the deceased spouse makes this election on an estate tax return. Rules for the portability election apply to married spouses where the first spouse died on or after January 1, 2011.

The estate of the deceased has to file an estate tax return, opting to enact the portability election, nine months after death plus any extension time given. The estate’s executor should make the decision to elect portability or not, but if there is no executor, any person in actual or constructive possession of any property of the decedent may make the election as a non-appointed executor. The executor has to follow specific rules to calculate the unused exclusion on the deceased’s return.

See Sally P. Schreiber, IRS Issues Rules On Portability Election, Journal of Accountancy, June 15, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.