< Back to Thought Leadership

Extension to Make Portability Elections

By: Derek Gray, CPA, Director

On July 8, 2022, the Internal Revenue Service released Revenue Procedure 2022-32, now extending the time to make portability elections to five years.

What is a Portability Election?

A timely filed portability election allows for a widow/widower, here referred to as a surviving spouse, to utilize their deceased spouse’s unused estate and gift tax exclusion amount. Portability elections can be made by filing a Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return and can result in large tax savings to taxpayers.

How Long Do You have to Make a Portability Election?

If a deceased spouse is not required to file an estate tax return, the IRS’s newly released Rev Proc 2022-32 allows for the simplified method to be used up to five years after the date of death of the decedent, as opposed to the former two years.

How Much is the Portability Election?

In 2018, the portability election amount was $11,180,000, meaning the surviving spouse could utilize any remaining gift tax exclusion amount from their deceased spouse up to $11,180,000. As of 2022, the portability election amount is up to $12,060,000.

What are the Benefits of Making a Portability Election Soon After Death?

It is important to look at the portability election amount and whether it may change. For example, if the current $12,060,000 drops to $6,500,000, then the surviving spouse would only be able to use their own $6,500,000 exemption. If instead, they had made the portability election, they would have their own exemption of $6,500,000 plus any unused exemption from their deceased spouse. This additional exemption amount could be the difference between there being a taxable estate or not.

With the new revenue procedure, taxpayers now have up to five years to decide on the portability election, providing a new opportunity to those whose spouses passed away between two and five years ago.

If you are a surviving spouse, your spouse passed away within the past five years, and the executor of the estate has not filed a Form 706 to make a portability election, contact your local Blue & Co advisor, or contact Derek Gray to see if you would benefit from filing an estate tax return.

Proposed Updates to Medicare Bad Debt Listing Template

Recently there have been conversations around the potential new template from CMS that will be used for the Medicare Bad Debt listing that is filed with your organization’s cost report. As of July 2022, this new template is still in the proposed stage, and Medicare is accepting comments. You do not have to use this new […]

Learn More
Picture of disctionary defining legislation | Senate Passes Inflation Reduction Act of 2022 | New Legislation

Senate Passes Inflation Reduction Act of 2022

By Amy Sandlin, CPA, Tax Senior Manager The Inflation Reduction Act of 2022 (the Act) passed in the Senate on Sunday, August 7, 2022, and is headed to the Democrat-controlled House where it is expected to pass on Friday, August 12. Experts expect this to be on President Biden’s desk by early next week. If […]

Learn More
INSIDE Public Accounting Top 100 Firms | Blue & Co. Ranks 52 on the INSIDE Public Accounting Top 100 Firms

Blue & Co. Climbs Six Spots on INSIDE Public Accounting Top 100 Firms List

CARMEL, Ind. (August 5, 2022) – Blue & Co., LLC is honored to announce that it has achieved the recognition of being ranked number 52 by INSIDE Public Accounting (IPA), based on the 2022 annual INSIDE Public Accounting Survey and Analysis of Firms. Blue previously was ranked at 58 in 2021, and 61 in 2020. […]

Learn More