SECTION 2. BACKGROUND

2.01. In General

Sections 302(a)(1) and 303(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. L. No. 111–312, 124 Stat. 3296, 3302 (2010), amended section 2010(c) of the Code to allow the estate of a decedent who is survived by a spouse to make a portability election to permit the surviving spouse to apply the decedent’s unused exclusion (the deceased spousal unused exclusion amount, or DSUE amount) to the surviving spouse’s own transfers during life and at death. The portability election may be made only by the estates of decedents dying after December 31, 2010.

Section 2010(c)(2), as amended, 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) defines the basic exclusion amount as $5,000,000, to be adjusted for inflation in each year after calendar year 2011. Section 2010(c)(4) defines the DSUE amount as the lesser of (A) the basic exclusion amount or (B) the excess of the basic exclusion amount of the last deceased spouse of the surviving spouse over the amount with respect to which the tentative tax is determined under section 2001(b)(1) on the estate of such deceased spouse.

Section 2010(c)(5)(A) provides certain requirements that the executor of a deceased spouse must satisfy to allow a surviving spouse to apply the DSUE amount of a deceased spouse. In particular, the executor of the estate of the deceased spouse must file a Form 706 that includes a computation of the DSUE amount and on which the executor elects portability of the DSUE amount. Under section 2010(c)(5)(A), a portability election is effective only if made on a Form 706 that is filed within the time prescribed

March 5, 2012 450 2012–10 I.R.B.

the executor meets the following requirements:

a. The executor files Form 4768 with the Service office designated in the form’s instructions;

b. The executor files Form 4768 no later than 15 months from the decedent’s date of death; and

c. The executor enters at the top of Form 4768 the notation “Notice 2012–21, Extension for Good Cause Shown” or otherwise sufficiently notifies the Service on or with Form 4768 that Form 4768 is being filed pursuant to this notice.

5.02. The executor of a qualifying estate following the requirements of subsection 5.01 of this section will be deemed to have shown good and sufficient cause and to have provided all explanations required under § 20.6081–1(c) without the need for the executor to include any further explanations on Form 4768.

5.03. If, prior to the issuance of this notice, an executor of a qualifying estate filed a Form 706 after the due date for filing Form 706 had passed, but before 15 months from the decedent’s date of death, without having timely requested an automatic six-month extension of time to file Form 706, the executor may file Form 4768 in accordance with the requirements of this section and the extension will relate back to the due date of Form 706.

5.04. An executor of a qualifying estate may file Form 4768 at the same time as the executor files Form 706, as long as both are filed on or before the date that is 15 months after decedent’s date of death. 5.05. For purposes of section 6081, except in the case of an executor abroad, Treasury and the Service cannot grant additional extensions of time to file Form 706 beyond the six-month extension granted in this notice, regardless of whether an executor files a Form 4768 requesting an additional extension of time to file.

DRAFTING INFORMATION

The principal author of this notice is Karlene Lesho of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice, contact Karlene Lesho at (202) 622–3090 (not a toll-free call).

amount. In addition, Notice 2011–82 announces that the estate of a decedent who is survived by a spouse will be deemed to elect portability of the DSUE amount by the timely filing of a complete and properly-prepared Form 706. Furthermore, the notice provides that a timely-filed and complete Form 706 that is prepared in accordance with the instructions for that form will be deemed to contain the computation of the DSUE amount until such time as the Service revises Form 706 to expressly contain the computation of the DSUE amount. Notice 2011–82 also provides guidance to the estates of deceased spouses who choose not to make the portability election. Finally, Notice 2011–82 announces that the Treasury Department (Treasury) and the Service intend to issue regulations to implement the portability provisions included in section 2010(c) of the Code and, therefore, the notice invites public comment on a number of issues affecting portability for Treasury and the Service to consider.