IRS Extension of Estate Tax Break Takes Effect | Law Firm Newswire

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/

  • Assuming Roles of Trustee and Power of Attorney
    Your loved one has lost capacity and you are named in their Power of Attorney and/or Trust – Now what? If you are fortunate, your loved ones have done their estate planning and put documents in place to enable a trusted person to assume the management of their financial affairs in the event of their […]
  • The Effect of Annuities on Long-Term Care Plans
    Annuities are great investments for people who are frightened by the stock market or need a tax-deferred investment, and they have long been used to ensure a guaranteed income in retirement. In simple terms, an annuity is a contract with an insurance company whereby the purchaser pays a certain amount of money and the insurance […]
  • What Happens to My Online Accounts After I Die?
    In today’s world, many people connect with friends and family via social media more than they do in “real life.” Additionally, online shopping has expanded vastly in the past several years, and most people have several online accounts they use regularly. While the Internet has allowed us to have more connections and to conduct business […]
  • Impeaching Wills
    We often hear from family members who are unhappy with the terms of a loved one’s current Will. The issue is often laced with problematic family dynamics where multiple people claim undue influence or lack of capacity. This intricate web of issues can lead to expensive litigation. As an attorney, the most important factor when […]
  • Is That Really Enough to Retire?
    A recent study by the Associated Press NORC Center for Public Affairs research found that almost 40% of Americans feel confident in their retirement savings. This appears to be a positive statistic given that 10,000 Americans reach 65, traditional retirement age, every day. However, some experts argue that the confidence may be faulty, or, may […]

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



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

* indicates required