Form 706 Allows You to Opt Out of Portability

The IRS recently posted a draft of Form 706, The U.S. Estate and Generation-Skipping Transfer Tax Return. For the first time, the draft form addresses portability of a deceased spouses’ unused estate and gift tax exclusion amount.  The portability option allows a surviving spouse to increase his or her exclusion amount by the unused amount of the deceased spouse.  This portability provision is set to expire at the end of 2012.

Previously, filing a Form 706 meant that you automatically wanted to make the portability election.  Part 6 on the new form features a “Denial of Portability” check box.  

See Draft Form 706 Provides Check Box To Not Elect Portability, Journal of Accountancy, Aug. 17, 2012. 

Special thanks to Bill Gustoff, JD (Executive Vice President, Thompson & Associates) for bringing this article to my attention.