Part VI—Portability of Deceased Spousal Unused Exclusion (DSUE)

Section 2010(c)(4) authorizes estates of decedents dying after December 31, 2010, to elect to transfer any unused exclusion to the surviving spouse. The amount received by the surviving spouse is called the deceased spousal unused exclusion (DSUE) amount. If the executor of the decedent’s estate elects transfer, or portability, of the DSUE amount, the surviving spouse can apply the DSUE amount received from the estate of the surviving spouse’s last deceased spouse (defined later) against any tax liability arising from subsequent lifetime gifts and transfers at death.

Note: A nonresident surviving spouse who is not a citizen of the United States may not take into account the DSUE amount of a deceased spouse, except to the extent allowed by treaty with the nonresident surviving spouse’s country of citizenship.

Last Deceased Spouse Limitation The last deceased spouse is the most recently deceased person who was married to the surviving spouse at the time of that person’s death. The identity of the last deceased spouse is determined as of the day a taxable gift is made, or in the case of a transfer at death, the date of the surviving spouse’s death. The identity of the last deceased spouse is not impacted by whether the decedent’s estate elected portability or whether the last deceased spouse had any DSUE amount available. Remarriage also does not affect the designation of the last deceased spouse and does not prevent the surviving spouse from applying the DSUE amount to taxable transfers.

When a taxable gift is made, the DSUE amount received from the last deceased spouse is applied before the surviving spouse’s basic exclusion amount. A

Item 18. If item 17 is less than or equal to the value (at the time of the decedent’s death) of the property subject to claims, enter the amount from item 17 on item 18.

If the amount on item 17 is more than the value of the property subject to claims, enter the greater of:

• The value of the property subject to claims, or

• The amount actually paid at the time the return is filed.

In no event should you enter more on item 18 than the amount on item 17. See section 2053 and the related regulations for more information.

Instructions for Form 706 (Rev. 7-2026) 21

Table of Estimated Values

22 Instructions for Form 706 (Rev. 7-2026)

Table of Estimated Values (continued)

surviving spouse may use the DSUE amount of the last deceased spouse to offset the tax on any taxable transfer made after the deceased spouse’s death. A surviving spouse who has more than one predeceased spouse is not precluded from using the DSUE amount of each spouse in succession. A surviving spouse may not use the sum of DSUE amounts from multiple predeceased spouses at one time nor may the DSUE amount of a predeceased spouse be applied after the death of a subsequent spouse.

Making the Election A timely filed and complete Form 706 is required to elect portability of the DSUE amount to a surviving spouse. The filing requirement applies to all estates of decedents choosing to elect portability of the DSUE amount, regardless of the size of the estate. A timely filed return is one that is filed on or before the due date of the return, including extensions. See Rev. Proc. 2022-32 (superseding Rev. Proc. 2017-34) for the simplified procedures for late elections.

The timely filing of a complete Form 706 with DSUE will be deemed a portability election if there is a surviving spouse. The election is effective as of the decedent’s date of death, so the DSUE amount received by a surviving spouse may be applied to any transfer occurring after the decedent’s death. A portability election is irrevocable, unless an adjustment or amendment to the election is made on a subsequent return filed on or before the due date.

Note: Under Regulations section 20.2010-2(a)(5), the executor of an estate of a nonresident decedent who was not a citizen of the United States at the time of death cannot make a portability election.

If an executor is appointed, qualified, and acting with the United States on behalf of the decedent’s estate, only that executor may make or opt out of a portability election. If there is no executor, see Regulations section 20.2010-2(a)(6)(ii).

Opting Out If an estate files a Form 706 but does not wish to make the portability election, the executor can opt out of

the portability election by checking the box indicated in Section A of this Part. If no return is required under section 6018(a), not filing Form 706 will avoid making the election.

Figuring the DSUE Amount Regulations section 20.2010-2(b) requires that a decedent’s DSUE be figured on the estate tax return. The DSUE amount is the lesser of (a) the basic exclusion amount in effect on the date of death of the decedent whose DSUE is being figured, or (b) the decedent’s applicable exclusion amount less the amount on Part II, line 5 on the Form 706 for the estate of the decedent. Amounts on which gift taxes were paid are excluded from adjusted taxable gifts for the purpose of this computation.

When a surviving spouse applies the DSUE amount to a lifetime gift or bequest at death, the IRS may examine any return of a predeceased spouse whose executor elected portability to verify the allowable DSUE amount. The DSUE amount may be adjusted or eliminated as a result of the examination; however, the IRS may only make an assessment of additional tax on the return of the predeceased spouse within the applicable limitations period under section 6501.

Special Rule Where Value of Certain Property Not Required To Be Reported on Form 706 The regulations provide that executors of estates who are not otherwise required to file Form 706 under section 6018(a) do not have to report the value of certain property qualifying for the marital or charitable deduction. For such property, the executor may estimate the value in good faith and with the due diligence to be afforded all assets includible in the gross estate. The amount reported on Form 706 will correspond to a range of dollar values and will be included in the value of the gross estate shown on Part II, line 1. See the instructions for Part V, Item 10 and Item 23, earlier, for more details.

Specific Instructions for Part VI

Portability election. If you intend to elect portability of the DSUE amount, timely filing a complete Form 706 is all that is required. Complete Section B if any assets of the estate are being transferred to a QDOT and complete

Instructions for Form 706 (Rev. 7-2026) 23

Section C of this Part to figure the DSUE amount that will be transferred to the surviving spouse.

Section A. Opting out of portability. If you are filing Form 706 and do not wish to elect portability, then check the box indicated. Do not complete Section B or C.

Section B. Portability and QDOTs. A QDOT allows the estate of a decedent to bequeath property to a surviving spouse who is not a citizen of the United States and still receive a marital deduction. When property passes to a QDOT, estate tax is imposed under section 2056A as distributions are made from the trust. When a QDOT is established and there is a DSUE amount, the executor of the decedent’s estate will determine a preliminary DSUE amount for the purpose of electing portability. This amount will decrease as section 2056A distributions are made. In estates with a QDOT, the DSUE amount generally may not be applied against tax arising from lifetime gifts because it will not be available to the surviving spouse until it is finally determined, usually upon the death of the surviving spouse or when the QDOT is terminated.

Note: If a surviving spouse who is not a citizen of the United States becomes a citizen and the section 2056A tax no longer applies to the assets of the QDOT, as of the date the surviving spouse becomes a U.S. citizen, the DSUE amount is considered final and is available for application by the surviving spouse. See Regulations sections 20.2010-2(c)(4), 20.2010-3(c)(3), and 25.2505-2(d)(3).

Check the appropriate box in this section and see the instructions for Schedule M (Form 706) if more information is needed about QDOT.

Section C. DSUE amount portable to decedent’s surviving spouse. Complete Section C only if electing portability of the DSUE amount to the surviving spouse.

On line 1, enter the decedent’s applicable exclusion amount from Part II, line 9d. The applicable exclusion amount is the sum of the basic exclusion amount for the year of death, any DSUE amount received from a predeceased spouse, if applicable, and any Restored Exclusion Amount.

On line 2, enter the value of the cumulative lifetime gifts on which gift tax was paid or payable, from the Line 7 Worksheet, Part B, line 6. Enter the amount as it appears.

On line 8, figure the unused exclusion amount. On line 9, enter the basic exclusion amount from Part II, line 9a.

On line 10, enter the smaller of line 8 or line 9. This will be the DSUE amount available to the surviving spouse.

Section D. DSUE amount received from predeceased spouse(s). Complete Section D if the decedent was a surviving spouse who received a DSUE amount from one or more predeceased spouses.

On line 2, provide information as requested if the decedent had any other predeceased spouse whose executor made the portability election. Any remaining DSUE amount which was not used prior to the death of a subsequent spouse is not considered in this calculation and cannot be applied against any taxable transfer.

On line 3, enter only the total amounts of DSUE received and used from spouses who died before the decedent’s last deceased spouse, line 2, column E.

On line 4, add line 3 and line 1, column D, if any, to determine the decedent’s total DSUE amount.