The IRS has issued guidance on the portability election pursuant to this Notice.
Estates of decedents who die in 2011 and 2012 that want to elect portability must timely file a properly prepared estate tax return (Form 706) even if there is no estate tax liability. Failure to file a Form 706 will prohibit the surviving spouse’s use of the pre-deceased spouse’s unused estate and gift tax exclusion amount.
According to the IRS, there are no special boxes to check or statements to make on Form 706 in order to make the election. The Form 706 that is filed will be deemed to contain the computation of the unused exclusion amount.
If the estate files a Form 706 and does not wish to make the portability election, the Executor must attach a statement to that effect or write across the top of the estate tax return “NO ELECTION UNDER SECTION 2010(c)(5).”
The IRS intends to issue Regulations to implement the portability provisions of I.R.C. § 2010(c).