National Association of Estate Planners and Councils

September, 2017 Newsletter
Provided by Leimberg Information Services

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Mike Jones on Revenue Procedure 2017-34: IRS Grants Extension of Time to File Estate Tax Return Claiming Deceased Spouse's Unused Exclusion Amount in Certain Circumstances

“The better practice is to make portability elections on a timely filed estate tax return. But, where the election was missed, taking advantage of relief available under this Revenue Procedure will avoid the cost and delay of seeking a private letter ruling.  Practitioners should note that, while Rev. Proc. 2017-34 provides relief, it should not be viewed as establishing “best practices.” Therefore, practitioners are urged to timely file estate tax returns to make portability elections for all estates when the election may be desired and to view relief of any kind only as a last resort.”



We close the week with Mike Jones’ commentary on Revenue Procedure 2017-34. Mike would like to thank Keith Schiller for his insights, editing and comments.


Before we get to Mike’s commentary, members should note Bob Keebler’s upcoming LISI webinar on July 25th @ 3:00pm titled "Best Ideas in 2017 - What the Planner Needs to Know." There's no better time than the present for advisors to join Bob as he reviews some of the best planning ideas in 2017. 


Topics will include planning for the federal income tax, state income tax, asset protection and the estate tax. The intent of the program is to provide planners with a number of ideas which may be particularly effective in the current environment. During his webinar, Bob will cover the following:


Federal Income Tax Planning

o   Roth conversions by asset class

o   The proposed "five-year IRA rule"

o   CRTs for deferral & rate arbitrage

o   Installment sales for deferral & rate arbitrage

o   Qualified small business stock - A zero percent rate

o   Puerto Rico - The ultimate tax haven?

State Income Tax Planning

o   Incomplete non-grantor trusts to save state/federal taxes

o   Trust situs

Asset Protection Planning

o   Domestic asset protection trusts

o   ERISA plans & IRAs

o   Third party trusts

o   LLCs in "charging order states"

o   Compartmentalizing risk

Estate Tax Planning

o   Key dates for potential repeal

o   Dynasty trusts and IDGTs

o   Spousal limited access trusts

o   9-year GRAT for 10-year repeal

o   Life insurance strategies

For more information and to register (LISI members get special pricing!), simply click this link: 

Bob Keebler: Best Ideas in 2017 - What the Planner Needs to Know

For those who have a conflict with the date/time (Tuesday, July 25th at 3pm EDT), the session will be recorded. Simply register and you will have unlimited, 24-hour access.


Click this link to read Mike Jones’ commentary.


A deceased spouse’s unused estate tax exclusion amount can be a valuable asset to the decedent’s surviving spouse.


For example, if a spouse who has made no lifetime taxable gifts dies during 2017 leaving a taxable estate of $1,540,000, the executor of that estate may elect to port the decedent’s estate’s unused Applicable Exclusion Amount of $4,050,000 to the surviving spouse (the first deceased spouse’s estate’s Basic Exclusion Amount of $5,490,000, minus the first deceased spouse’s taxable estate of $1,540,000).


The surviving spouse may then transfer, either by gift or upon death, without having to pay gift or estate taxes, the predeceased spouse’s unused exclusion amount (DSUE) of $3,950,000, plus the surviving spouse’s own basic exclusion amount ($5,490,000 in 2017). Because of portability, the couple may together make taxable transfers during 2017 totaling up to $10,980,000, no matter what portion of that amount the first deceased spouse has used up during lifetime or at death. The surviving spouse may also make tax-free gifts in future years of the annual inflation increase that applies to the Basic Exclusion Amount of the surviving spouse plus the DSUE from this last-deceased spouse (in addition to annual exclusion gifts). The DSUE does not adjust with inflation.


In cases where an estate tax return is required (because the filing threshold is met), a timely filed estate tax return (including a return filed under a valid extension) is mandatory to port DSUE to the surviving spouse.


In cases where an estate tax return is not required (because the filing threshold wasn’t met), that golden opportunity should not be missed. But, if a timely non-required return making a DSUE election wasn’t filed, there may still be hope to make a portability election, without having to file a private letter ruling request. That’s where Revenue Procedure 2017-34 comes in.




Mike Jones



LISI Estate Planning Newsletter #2569 (July 20, 2017) at   Copyright 2017 Leimberg Information Services, Inc. (LISI).  Reproduction in Any Form or Forwarding to Any Person Prohibited – Without Express Permission. 


Rev. Proc. 2017-34, 2017-26 I.R.B. 1282 (6/26/17); Internal Revenue Code Sections 2010, 6501; Treasury Regulations sections 20.2010-1 through 20.2010-3; 301.9100-1 through 301.9100-3

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