5 Things Tax Pros Are Thankful for This Thanksgiving
From the passage of the Taxpayer First Act to a change in U.S. Tax Court rules allowing limited attorney appearances, tax attorneys have a lot to be grateful for this Thanksgiving.
Here, Law360 looks at five tax developments that practitioners are thankful for in 2019.
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Late Portability Elections
In estate and gift taxes, a portability election lets a personal representative of a deceased spouse make an election on the decedent's estate tax return to “port” or transfer an unused exclusion amount to the surviving spouse. Tax practitioners appreciate two recent private letter rulings that provide greater flexibility for the election.
In the separate rulings, one estate in February was given more time to make a portability election, and a similar extension was allowed for another estate in April.
Sean R. Weissbart, a partner at Blank Rome LLP who specializes in trusts, estates and tax-exempt organizations, told Law360 that he was thankful for these PLRs because they demonstrate that the IRS continues to permit late portability elections.
In marriage there is a tax benefit known as “portability” of exemption amounts between spouses, so that any unused gift and estate tax exemption of the deceased spouse can be transferred to the surviving spouse, Weissbart said. But in order to receive the portability benefit, the estate's personal representative must file a federal estate tax return within nine months of the spouse's death, he said.
This deadline can be easily overlooked because a personal representative is not required to file an estate tax return unless the decedent had enough wealth to be subject to estate tax, which the majority of Americans do not, Weissbart said.
“Fortunately, the IRS has continued its leniency in permitting personal representatives to make a portability election beyond the often emotional nine-month period following a spouse's death,” he said.
"5 Things Tax Pros Are Thankful for This Thanksgiving," by Amy Lee Rosen was published in Law360 Tax Authority on November 26, 2019.