Marcum Trusts & Estates Leader Responds to IRS Extension on Estate Tax Portability Filing

New York City, NY – David M. First Firmwide Partner-in-Charge of the Trusts and Estates Practice Group at Marcum LLP, responded today to the filing extension granted this week by the Internal Revenue Service for estate tax portability.  Marcum is a top national accounting and advisory services firm.

“The portability extension is important because it affects quite a large number of people,” Mr. First said.

Portability applies to decedents dying after December 31, 2010, who are survived by a spouse. The portability election allows the surviving spouse to apply the decedent spouse’s unused exclusion (DSUE) amount to the surviving spouse’s own transfers during life and at death. The law was originally set to expire on January 1 last year, but was made permanent as part of the American Taxpayer Relief Act (ATRA) of 2013. 

In order to elect portability, the executor of the estate of the deceased spouse must do so on a timely filed US Estate Tax return, Form 706. The due date of an estate tax return required to elect portability is nine months after the decedent’s death or the last day of the period covered by an extension.  For estates below the threshold for filing (i.e., assets whose values are below $5,250,000 in 2013), the only reason to file a return was to make the portability election.

“Needless to say, there have been many instances where returns were not filed and elections not made, causing the loss of the opportunity to retain the DSUE,” Mr. First said. “There were relief provisions that taxpayers could avail themselves of to obtain an extension of time to file the 706, but they were cumbersome and probably expensive. The IRS believed that a simplified method should be available to obtain an extension of time to elect portability.”

Under the revised procedure, if the estate meets certain requirements, the IRS has granted blanket relief for estates of decedents who died in 2011, 2012 or 2013, if the estate was not required to file an estate tax return. The IRS will allow these estates until December 31, 2014 to file a return to elect portability.

“This is a great opportunity for those estates that could have elected portability, but didn’t for whatever reason, to get a second bite at the apple, potentially saving the family a significant amount of money,” Mr. First said.

As the Firm wide Partner-In-Charge of the Firm’s Trusts and Estates Practice Group, David M. First is often engaged by individuals, fiduciaries, closely-held businesses and larger companies for his extensive knowledge and expertise with trust and estate tax matters. He provides a broad range of tax planning, compliance and consulting services to ensure the preservation of family wealth. Mr. First is also a member of the Marcum Family Office and High-Net-Worth Individuals practice groups.

Mr. First lends his expertise on taxation issues related to trust and estate services as a speaker and author. He has delivered numerous presentations and technical seminars to a variety of professional audiences. In addition, Mr. First has written articles for The CPA Journal and the Tri-State Tax Letter Plus, where he served on its Editorial Board.

Mr. First joined the Firm in 1999 as a Partner when he merged his New York City-based accounting practice with Marcum. There he provided tax and consulting services to closely-held businesses and individuals. In addition, he was member of the firm’s management committee and an in-house instructor for training seminars on taxation and succession planning. Earlier in his career, Mr. First was a Senior Manager at an international accounting firm.

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