GiftLaw Note:
Decedent died and was survived by Spouse. Decedent's estate (Estate) was not required under Sec. 6018(a) to file an estate tax return Form 706. Estate represents there was an unused portion of Decedent's applicable exclusion amount. A portability election is required to allow Spouse to take into account the deceased spousal unused exclusion (DSUE) amount. For various reasons, Estate did not timely file Form 706 or make a portability election. Information, affidavits and representations submitted on behalf of Estate explained the circumstances related to the failure to file Form 706 and showed the Estate acted reasonably and in good faith. Estate has requested an extension of time under Reg. 301.9100-3 to make a portability election.

The transfer of the taxable estate of every decedent is subject to tax under Sec. 2001(a). Section 2010(a) provides an applicable credit amount for every decedent. Section 2010(c) allows spousal portability of a deceased spouse's unused applicable exclusion amount. Under Sec. 2010(c)(5)(A), the DSUE may not be accounted for unless the deceased spouse's estate files an estate tax return making the election. The due date for filing the estate tax return is nine months after the decedent's date of death under Reg. 20.2010-2(a)(1). The estate may, however, file for an extension of time under Reg. 301.9100-3 to make a portability election if the estate was not required under Sec. 6018(a) to file an estate tax return. Regulation 301.9100-1(c) gives the Commissioner the discretion to grant a reasonable extension of time, if taxpayer provides satisfactory evidence that establishes they acted reasonably and in good faith and that granting the relief will not prejudice the interests of the government. Here, the Service found that Estate's representations satisfied the requirements under Reg. 301.9100-1 and Reg. 301.9100-3. Therefore, Estate received a 120-day extension to file the portability election.