rp-17-34.pdf

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Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.201: Rulings and determination letters.
(Also Part I, Section 2010; 20.2010-2; 301.9100-3)

Rev. Proc. 2017-34

SECTION 1. PURPOSE
This revenue procedure provides a simplified method for certain taxpayers to
obtain an extension of time under § 301.9100-3 of the Procedure and Administration
Regulations to make a “portability” election under § 2010(c)(5)(A) of the Internal
Revenue Code (Code). For purposes of the Federal estate and gift taxes, a portability
election allows a decedent’s unused exclusion amount (deceased spousal unused
exclusion amount, or DSUE amount) to become available for application to the surviving
spouse’s subsequent transfers during life or at death. The simplified method provided
in this revenue procedure is to be used in lieu of the letter ruling process. No user fee is
required for submissions filed under this revenue procedure.
SECTION 2. BACKGROUND
.01 Rules for Portability

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(1) Section 303(a) of the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010 (TRUIRJCA), Pub. L. No. 111-312,
124 Stat. 3296, 3302 (2010), amended § 2010(c) of the Code to allow the estate of a
decedent who is survived by a spouse to make a portability election. For purposes of
the Federal estate and gift taxes, a portability election allows the surviving spouse to
apply the decedent’s DSUE amount to the surviving spouse’s own transfers during life
and at death. The portability election applies to estates of decedents dying after
December 31, 2010, if such decedent is survived by a spouse. The portability
provisions under § 2010(c) of the Code were scheduled to expire on January 1, 2013,
pursuant to §§ 101(a)(1) and 304 of TRUIRJCA. However, § 101(a) of the American
Taxpayer Relief Act of 2012 (ATRA), Pub. L. No. 112-240, 126 Stat. 2313 (2013), made
the ability to elect portability permanent.
(2) Section 2010(c)(2) of the Code defines the applicable exclusion amount
used to determine the applicable credit amount as the sum of the basic exclusion
amount and, in the case of a surviving spouse, the DSUE amount. Section 2010(c)(3)
of the Code defines the basic exclusion amount as $5,000,000, as adjusted for inflation
in each year after calendar year 2011. Section 2010(c)(4) of the Code, as amended
pursuant to a technical correction in § 101(c) of ATRA, defines the DSUE amount as the
lesser of (A) the basic exclusion amount, or (B) the excess of the applicable exclusion
amount of the last deceased spouse of the surviving spouse over the amount with
respect to which the tentative tax is determined under § 2001(b)(1) of the Code on the
estate of such deceased spouse.

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(3) Section 2010(c)(5)(A) provides certain requirements that the executor of
the estate of a deceased spouse must satisfy to elect portability and thereby make the
decedent’s DSUE amount available to the decedent’s surviving spouse. In particular,
the executor of the estate of the deceased spouse must elect portability of the DSUE
amount on an estate tax return, which must include a computation of the DSUE amount.
Under § 2010(c)(5)(A), a portability election is effective only if made on an estate tax
return that is filed within the time prescribed by law (including extensions) for filing such
return.
(4) On June 18, 2012, the Department of the Treasury (Treasury) and the
Internal Revenue Service (the Service) published in the Federal Register (77 FR 36150)
temporary regulations under §§ 2010 and 2505 (T.D. 9593, 2012-28 I.R.B. 17). The
portability provisions of the temporary regulations have retroactive effect, applying to
estates of decedents dying on or after January 1, 2011. On the same day, a notice of
proposed rulemaking (REG-141832-11) containing regulations proposed by cross-
reference to the temporary regulations was published in the Federal Register (77 FR
36229). Treasury and the Service published final regulations (80 FR 34279) under
§§ 2010 and 2505 on June 16, 2015 (T.D. 9725, 2015-26 I.R.B. 1122), which generally
adopt the rules in the temporary and proposed regulations and apply to estates of
decedents dying on or after June 12, 2015.
(5) Section 20.2010-2(a)(1) of the Estate Tax Regulations provides that an
estate that elects portability will be considered, for purposes of subtitle B and subtitle F
of the Code, to be required to file a return under § 6018(a). Accordingly, the due date of
an estate tax return required to elect portability is 9 months after the decedent’s date of

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death or the last day of the period covered by an extension (if an extension of time for
filing has been obtained). Section 20.2010-2(a)(1) further provides that an extension of
time to elect portability will not be granted under § 301.9100-3 to an estate that is
required to file an estate tax return under § 6018(a), as determined based on the value
of the gross estate and adjusted taxable gifts and without regard to the need to file for
portability election purposes. Such an extension, however, may be available to an
estate that is not required to file an estate tax return under § 6018(a), as determined
based on the value of the gross estate and adjusted taxable gifts and without regard to
the need to file for portability election purposes.
(6) Section 20.2010-2(a)(2) provides that, upon the timely filing of a complete
and properly prepared estate tax return, an executor of an estate of a decedent survived
by a spouse will have elected portability of the decedent’s DSUE amount unless the
executor chooses not to elect portability and satisfies the requirements in § 20.2010-
2(a)(3)(i) for the portability election not to apply.
.02 Extensions Granted to Elect Portability under § 301.9100-3
(1) Section 301.9100-3 provides the standards that the Service is to apply to
determine whether to grant an extension of time to make an election whose due date is
prescribed by a regulation or other administrative guidance (and not by statute). The
due date for electing portability for those estates not required by § 6018(a) to file an
estate tax return is prescribed by § 20.2010-2(a), and not by statute. Therefore, the
executor of such an estate may seek an extension of time under § 301.9100-3 to elect
portability under § 2010(c)(5)(A).

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(2) In general, under § 301.9100-3, relief will be granted if the taxpayer
establishes to the satisfaction of the Commissioner that the taxpayer acted reasonably
and in good faith and that the grant of relief will not prejudice the interests of the
government.
(3) On February 10, 2014, the Service published Rev. Proc. 2014-18, 2014-7
I.R.B. 513, which provided a simplified method for obtaining an extension of time under
§ 301.9100-3 to make a portability election under § 2010(c)(5)(A) that was available to
the estates of decedents dying after December 31, 2010, if such an estate was not
required by § 6018(a) to file an estate tax return and if such a decedent was survived by
a spouse. However, this simplified method was available only on or before
December 31, 2014. The revenue procedure stated that, through that same date, the
Service would not issue letter rulings to such estates granting an extension of time
under § 301.9100-3 to make a portability election under § 2010(c)(5)(A).
(4) Since December 31, 2014, the Service has issued numerous letter rulings
under § 301.9100-3 granting an extension of time to elect portability under
§ 2010(c)(5)(A) in situations in which the decedent’s estate was not required by
§ 6018(a) to file an estate tax return. Many of these ruling requests have involved
estates of decedents that discovered the failure to elect portability not long after the due
date set forth in § 20.2010-2(a)(1) for filing an estate tax return to elect portability.
Other ruling requests have involved estates of decedents with a date of death in the first
years after the enactment of the portability election provisions, where the executor did
not know about the need to file a return to elect portability, or did not discover the failure
to elect portability, until many years later, often after the death of the surviving spouse.

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(5) Treasury and the Service have determined that the considerable number of
ruling requests for an extension of time to elect portability received since December 31,
2014, indicates a need for continuing relief for the estates of decedents having no filing
requirement under § 6018(a). Further, the considerable number of ruling requests
received has placed a significant burden on the Service. Accordingly, this revenue
procedure provides a simplified method to the estates of decedents having no filing
requirement under § 6018(a) to obtain an extension of time under § 301.9100-3 to elect
portability, provided that certain requirements (set forth in sections 3.01 and 4.01 of this
revenue procedure) are met.
(6) In providing this relief, Treasury and the Service have considered requests
received for a permanent and unlimited extension, but also have considered both the
statutory requirement of a timely filed return and the prejudice to the government from a
lack of available records and current appraisals resulting from a long delay between a
decedent’s death and the filing of an estate tax return for that decedent’s estate.
Accordingly, this revenue procedure provides a simplified method to obtain an extension
of time to elect portability that is available to the estates of decedents having no filing
requirement under § 6018(a) for a period the last day of which is the later of January 2,
2018, or the second anniversary of the decedent’s date of death. A taxpayer seeking
relief to elect portability after the second anniversary of a decedent’s death may do so
by requesting a letter ruling in accordance with the requirements of § 301.9100-3 and
Rev. Proc. 2017-1, 2017-1 I.R.B. 1 (or any successor revenue procedure).
(7) Making the simplified method of this revenue procedure available for all
eligible estates through January 2, 2018, provides additional relief to the estates of

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decedents with a date of death in the first years after the enactment of the portability
election provisions because the executors of those estates and their advisors may not
have been aware of the opportunity and need to file an estate tax return to elect
portability. Making the simplified method of this revenue procedure available after
January 2, 2018, to estates during the two-year period immediately following the
decedent’s date of death should not unduly compromise the ability of the taxpayer or
the Service to compute and verify the DSUE amount because the necessary records
are likely to be available during that period. In addition, limiting the availability of this
simplified method to that two-year period could be beneficial to the surviving spouse or
the surviving spouse’s estate in two ways. First, it increases the likelihood that the
portability election will be made before the surviving spouse or the executor of the
surviving spouse’s estate is required to file a gift or estate tax return, thus eliminating
the need to file such a return without claiming any DSUE amount and then, after the
portability election has been made, having to either file a supplemental return or file a
claim for a credit or refund. Second, if the allowance of the portability election made
pursuant to this revenue procedure and the corresponding revised computation of the
surviving spouse’s applicable credit amount would result in a credit or refund of the
surviving spouse’s gift or estate tax, the availability of the simplified method during the
two-year period may reduce the risk that the period under § 6511 for filing a claim for
that credit or refund (generally, extending three years from the date of filing or, if later,
two years from the date of payment) would expire before the portability election could
be made pursuant to this revenue procedure.

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SECTION 3. SCOPE
.01 In General. The simplified method of this revenue procedure is available to
the executor (either an appointed executor or, if none, a non-appointed executor, as
provided in § 20.2010-2(a)(6)) of the estate of a decedent if:
(1) The decedent:
(a) was survived by a spouse;
(b) died after December 31, 2010; and
(c) was a citizen or resident of the United States on the date of death.
(2) The executor is not required to file an estate tax return under § 6018(a) as
determined based on the value of the gross estate and adjusted taxable gifts and
without regard to the need to file for portability purposes;
(3) The executor did not file an estate tax return within the time required by
§ 20.2010-2(a)(1) for filing an estate tax return; and
(4) The executor satisfies all requirements of section 4.01 of this revenue
procedure.
.02 Executors that Timely Filed an Estate Tax Return. The simplified method of
this revenue procedure is not available to the estate of a decedent whose executor filed
an estate tax return within the time prescribed by § 20.2010-2(a)(1). Such an executor
either will have elected portability of the DSUE amount by timely filing that estate tax
return or will have affirmatively opted out of portability in accordance with
§ 20.2010-2(a)(3)(i).
.03 Failure to Qualify for Relief under this Revenue Procedure. The executor of
an estate not within the scope described in section 3.01 of this revenue procedure only

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because the executor does not satisfy the requirements of section 4.01 of this revenue
procedure may request an extension of time to make the portability election under
§ 2010(c)(5)(A) by requesting a letter ruling under the provisions of § 301.9100-3. The
requirements for requesting a letter ruling are described in Rev. Proc. 2017-1 (or any
successor revenue procedure).
SECTION 4. RELIEF FOR CERTAIN LATE PORTABILITY ELECTIONS
.01 Requirements for Relief. The requirements for relief under this revenue
procedure are as follows:
(1) A person permitted to make the election on behalf of the estate of a
decedent--that is, an executor described in § 20.2010-2(a)(6)--must file a complete and
properly prepared Form 706, United States Estate (and Generation-Skipping Transfer)
Tax Return, on or before the later of January 2, 2018, or the second annual anniversary
of the decedent’s date of death. The Form 706 will be considered complete and
properly prepared if it is prepared in accordance with § 20.2010-2(a)(7).
(2) The executor filing the Form 706 on behalf of the decedent’s estate must
state at the top of the Form 706 that the return is “FILED PURSUANT TO REV.
PROC. 2017-34 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A).”
.02 Extent of Relief. Satisfaction of the requirements for relief, as provided in
section 4.01 of this revenue procedure, by an executor for whom the relief is available
pursuant to section 3.01 of this revenue procedure, is deemed to satisfy the
requirements for relief under § 301.9100-3 and, upon that satisfaction, relief is granted
under the provisions of § 301.9100-3 to extend the time to elect portability under
§ 2010(c)(5)(A). Accordingly, for purposes of electing portability, the Form 706 of the

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decedent’s estate will be considered to have been filed timely in accordance with
§ 20.2010-2(a)(1).
.03 Subsequent Determination that Executor Is Required to File a Return under
§ 6018(a). If, subsequent to the grant of relief pursuant to this revenue procedure, it is
determined that, based on the value of the gross estate and taking into account any
taxable gifts, the executor was required to file an estate tax return under § 6018(a), the
grant of an extension as provided in section 4.02 of this revenue procedure is deemed
null and void ab initio.
SECTION 5. IMPACT OF RELIEF ON SURVIVING SPOUSE

.01 Application of DSUE Amount. If the decedent’s estate is granted relief under
this revenue procedure so that the estate tax return is considered to have been timely
filed for purposes of electing portability, the DSUE amount of that decedent is available
to the decedent’s surviving spouse or the estate of the surviving spouse for application
to the surviving spouse’s transfers made on or after the decedent’s date of death in
accordance with the rules prescribed under § 20.2010-3 of the Estate Tax Regulations
and § 25.2505-2 of the Gift Tax Regulations. However, if the increase in the surviving
spouse’s applicable exclusion amount attributable to the addition of the decedent’s
DSUE amount as of the decedent’s date of death results in an overpayment of gift or
estate tax by the surviving spouse or his or her estate, no claim for credit or refund may
be made if the period of limitations under § 6511(a) for filing a claim for credit or refund
of an overpayment of tax with respect to such transfer has expired. That is, an
extension of time to elect portability granted under this revenue procedure does not

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extend the period during which the surviving spouse or the surviving spouse’s estate
may make a claim for credit or refund under § 6511(a).
.02 Protective Claim for Credit or Refund of Tax in Anticipation of Relief under
this Revenue Procedure. Because a surviving spouse has no DSUE amount from a
deceased spouse to apply to such surviving spouse’s transfers until the portability
election has been made by the deceased spouse’s executor (see §§ 20.2010-3(a)(2)
and 25.2505-2(a)(2)), a claim for credit or refund of tax filed within the time prescribed in
§ 6511(a) by the surviving spouse or the estate of the surviving spouse in anticipation of
a Form 706 being filed to elect portability pursuant to this revenue procedure will be
considered a protective claim for credit or refund of tax.
.03 Examples.
(1) Example 1.
(a) Predeceasing Spouse (S1) dies on January 1, 2014, survived by
Surviving Spouse (S2). The assets includible in S1’s gross estate consist of cash on
deposit in bank accounts held jointly with S2 with rights of survivorship in the amount of
$2,000,000. S1 made no taxable gifts during life. S1’s executor is not required to file
an estate tax return under § 6018(a), and does not file such a return.
(b) S2 dies on January 30, 2014. S2’s taxable estate is $8,000,000 and S2
made no taxable gifts during life. S2’s executor files a Form 706 on behalf of S2’s
estate on October 30, 2014, claiming an applicable exclusion amount of $5,340,000.
S2’s executor includes payment of the estate tax with the Form 706.
(c) Pursuant to this revenue procedure, S1’s executor files a complete and
properly prepared Form 706 on behalf of S1’s estate on December 1, 2017, reporting a

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DSUE amount of $5,340,000. The executor includes at the top of the Form 706 the
statement required by section 4.01(2) of this revenue procedure. The filing of the return
satisfies the requirements for a grant of relief under this revenue procedure and S1’s
estate is deemed to have made a valid portability election. The Service accepts S1’s
return with no changes.
(d) To recover the estate tax paid, S2’s executor must file a claim for credit
or refund of tax by October 30, 2017 (the end of the period of limitations prescribed in
§ 6511(a)), even though a Form 706 to elect portability has not been filed on behalf of
S1’s estate by that date. Such a claim filed on Form 843, Claim for Refund and
Request for Abatement, in anticipation of the filing of the Form 706 by S1’s executor will
be considered a protective claim for credit or refund of tax. Accordingly, as long as the
Form 843 is filed on or before October 30, 2017, the Service can consider and process
that claim for credit or refund of tax once S1’s estate is deemed to have made a valid
portability election and S2’s estate notifies the Service that the claim for credit or refund
is ready for consideration.
(2) Example 2.
(a) The facts relating to S1 and S1’s estate are the same as in Example 1.
S2 makes a gift to Child of $6,000,000 on December 1, 2014. S2 has made no prior
taxable gifts. On April 15, 2015, S2 files a Form 709, United States Gift (and
Generation-Skipping Transfer) Tax Return, claiming an applicable exclusion amount of
$5,340,000. S2 tenders payment of the gift tax with the Form 709.

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(b) To recover the gift tax paid, S2 must file a claim for credit or refund of tax
(protective or otherwise) within the time prescribed in § 6511(a) for filing a claim for
credit or refund.
(3) Example 3.
(a) The facts are the same as in Example 2 except that S2’s Form 709
claims an applicable exclusion amount of $10,680,000 including a DSUE amount of
$5,340,000 from S1’s estate. As a result, the Form 709 reports no tax due and S2
tenders no gift tax.
(b) Although the portability election, once made, makes S1’s DSUE amount
available to S2 retroactively to S1’s date of death, that DSUE amount is not available
until the election is made. Because S2 files the Form 709 before S1’s estate makes the
portability election, S2’s claimed application of the DSUE amount will be denied and gift
tax on the transfer will be assessed. To recover that gift tax once the portability election
has been made by S1’s estate, S2 must file a claim for credit or refund of tax (protective
or otherwise) within the time prescribed in § 6511(a) for filing a claim for credit or refund.
SECTION 6. EFFECT ON OTHER DOCUMENTS
Rev. Proc. 2017-3, 2017-1 I.R.B. 130, is amplified.

SECTION 7. EFFECTIVE DATE
.01 In General. This revenue procedure is effective June 9, 2017.
.02 Letter Rulings Will Not Be Issued. Through the later of January 2, 2018, or
the second anniversary of a decedent’s date of death, the exclusive procedure for
obtaining an extension of time under § 301.9100-3 to make a portability election under
§ 2010(c)(5)(A) for the estate of a decedent, if the decedent and executor meet the

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requirements of section 3.01(1)-(3) of this revenue procedure, is the procedure
described in section 4.01 of this revenue procedure. If an executor of such an estate
has filed a request for a letter ruling seeking an extension of time under § 301.9100-3 to
make a portability election under § 2010(c)(5)(A) and that letter ruling is pending in the
National Office on June 9, 2017, the Office of the Associate Chief Counsel
(Passthroughs & Special Industries) will close its file on the ruling request and refund
the user fee, and the estate may obtain the relief granted by this revenue procedure
only by complying with section 4.01 of this revenue procedure.
SECTION 8. DRAFTING INFORMATION
The principal author of this revenue procedure is Juli Ro Kim of the Office of
Associate Chief Counsel (Passthroughs & Special Industries). For further information
regarding this revenue procedure contact Ms. Kim at (202) 317-6859 (not a toll-free
call).