A recent private letter ruling concludes that portability and qualified terminable interest property (QTIP) election at the death of a first spouse would not produce a date-of-death basis for the death of the surviving spouse. An unnecessary QTIP election is void when an estate makes the election in trust for the benefit of a surviving spouse. This marital deduction is not allowed to reduce the estate tax liability at death because, as concluded, it was unnecessary. Ultimately, this will deny the date-of-death basis at the death of the surviving spouse.
See Rodney L. Goodwin, IRS Rules No Date-of-Death Basis on Death of Surviving Spouse, Wealth Management, June 20, 2016.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
