» IRS Extension of Estate Tax Break Takes Effect

IRS Extension of Estate Tax Break Takes Effect

Hook Law Center (formerly Oast & Hook)

Hook Law Center (formerly Oast & Hook)

Virginia Beach, VA (Law Firm Newswire) March 12, 2014 – The Internal Revenue Service (IRS) recently extended a tax break for married couples.

The ruling, announced in Revenue Procedure 2014-18, extends the deadline to take advantage of an estate tax break known as “portability.” The break went into effect on an interim basis in 2011, and it was made permanent under the American Taxpayer Relief Tax Act of 2012.

“The IRS grants every U.S. citizen a “basic exclusion,” which is a lifetime exclusion amount from estate and gift taxes,” Andrew Hook, a Virginia Beach estate planning attorney, explained. “For 2014, that amount is $5.34 million. Portability allows widows and widowers to add the unused portion of their deceased spouse's basic exclusion to their own, increasing the amount of assets they can hand over to their own heirs tax-free.”

In order to elect portability, an estate tax return (IRS Form 706) must be filed on behalf of the estate of the deceased spouse. The normal deadline for doing so is nine months after the death, plus six months if an extension is requested.

Previously, many people who should have elected portability failed to do so, either because they or their advisors were unaware of the rule or because they did not expect the surviving spouse's financial worth to exceed the basic exclusion amount.

The recent IRS ruling allows portability to be elected for persons who died during calendar years 2011 through 2013, were U.S. citizens or residents upon death and had a surviving spouse. The deadline to take advantage of this extension by filing Form 706 is December 31, 2014. The IRS instructs those taking advantage of the ruling to write at the top of the form, “FILED PURSUANT TO REV. PROC. 2014-18 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A).”

The Revenue Procedure announcement also allows for the credit or refund of any taxes overpaid as the result of failure to elect portability. The deadline for doing so is three years from filing Form 706 or two years from the payment of the tax — whichever comes later.

“This Revenue Procedure is of particular interest to same-sex married couples, who were only recently allowed to elect portability,” Hook added. “Like opposite-sex couples, they can now not only elect portability going back to 2011, but likely get a refund on taxes they paid as the result of their previous exclusion from this tax break.”

Hook Law Center
295 Bendix Road, Suite 170
Virginia Beach, Virginia 23452-1294
Phone: 757-399-7506
Fax: 757-397-1267

SUFFOLK
5806 Harbour View Blvd.
Suite 203
Suffolk VA 23435
Phone: 757-399-7506
Fax: 757-397-1267
http://www.hooklawcenter.com/

  • Myths about Public Benefits
    In my years as an elder law practitioner, I’ve had clients come into me professing extensive knowledge of public benefits (particularly Medicaid) that were wildly off-base. There are any number of myths that have to do with public benefits planning, and I thought I would take this chance to “myth bust” some of the most […]
  • The Equifax Data Breach: Take This One Step Now
    As you have probably heard by now, Equifax, one of the three major credit reporting agencies, was hacked earlier this summer. As a result, nearly half the U.S. population’s personal data, including full names, addresses, dates of birth, and Social Security Numbers, is at risk. This is enough information for the hackers to open up […]
  • Palliative Care and Hospice: Quality of Life for Patients with Serious Illness
    Hook Law Center, P.C. recently had the pleasure of hosting Dr. Marissa Galicia-Costillo from Sentara Norfolk General at our most recent Coffee with Colleagues seminar to discuss the difference between hospice and palliative care. While many people have heard of hospice, few have heard of palliative care, and even fewer understand the difference between the […]
  • Exercise & Foreign Language
    While exercise and learning a second language may not be at the top of your list of priorities, a new study may shed light on how people acquire new skills and how learning and can be enhanced. Learning is a continual process which enriches us at every stage of life. Scientists already had lots of […]
  • The VA Choice Program
    Regardless of your personal politics, there are criticisms from both political parties about our current president and the actions he takes or hasn’t taken. In particular, healthcare and the repeal and replacement of the Affordable Care Act, commonly called Obamacare, has consumed the news lately. Prior to the spectacle around Obamacare, many healthcare advocates protested […]

See other news sources publishing this article. BETA | Tags: , , , , ,



Get headlines from Law Firm Newswire sent right to your inbox.

* indicates required