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Friday, September 30, 2011

Deceased Spouse's Unused Exemption Amounts

Starting in 2011, any unused exemption amounts of a deceased spouse (up to $5 million) may be passed along to the surviving spouse, even if there was no estate planning. The new portability election allows estates of married taxpayers to pass along the unused part of their exclusion amount to their surviving spouse. However, to make the portability election, a Form 706 must be timely filed with the IRS, even if the form would not otherwise be required. Form 706 is due 9 months after the date of death, and an extension may be obtained for an additional 6 months (but must be requested prior to the original deadline).
Note: Returns are due on October 3, 2011 for spouses that died on January 1, 2011!

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