Part 1 Estate and Gift Tax question: unused exclusion available

Part 1Estate and Gift Tax

Ted died in 2025 leaving everything to his wife, so no estate tax was due and no return was required. His executor wants his unused exclusion available to his wife. What must the executor do?

A Attach a portability statement to the wife's 2025 Form 1040
B File a Form 709 gift tax return for the wife within 9 months
C Nothing; portability applies automatically to a surviving spouse
D File Form 706 to elect portability, within 5 years of death

Show the answer and explanation

Answer: D. File Form 706 to elect portability, within 5 years of death

The deceased spousal unused exclusion (DSUE) amount passes to the surviving spouse only if the executor elects portability on a complete and properly prepared Form 706. For estates not otherwise required to file, Rev. Proc. 2022-32 allows the election up to the fifth anniversary of death. It is not automatic. Source: IRC 2010(c)(5)(A); Rev. Proc. 2022-32; Form 706 instructions, Extension to elect portability. Tax year: 2025 (law as of 31 Dec 2025).

Common mistake

Assuming portability applies without a Form 706.

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Part 1 Estate and Gift Tax question: unused exclusion available

Answer: D. File Form 706 to elect portability, within 5 years of death

Common mistake

Related Part 1 practice questions

Part 1 Estate and Gift Tax question: unused exclusion available

Answer: D. File Form 706 to elect portability, within 5 years of death

Common mistake

Related Part 1 practice questions