Portability of a Deceased Spousal Unused Exclusion Amount, 36229-36231 [2012-14775]

Agencies

• Internal Revenue Service
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 77, Number 117 (Monday, June 18, 2012)]
[Proposed Rules]
[Pages 36229-36231]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14775]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 20 and 25

[REG-141832-11]
RIN 1545-BK74


Portability of a Deceased Spousal Unused Exclusion Amount

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to temporary 
regulations and notice of public hearing.

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SUMMARY: In the Rules and Regulations section of this issue of the 
Federal Register, the IRS is issuing temporary regulations that provide 
guidance on the estate and gift tax applicable exclusion amount, in 
general, as well as on the applicable requirements for electing 
portability of a deceased spousal unused exclusion (DSUE) amount to the 
surviving spouse and on the applicable rules for the surviving spouse's 
use of this DSUE amount. The text of the temporary regulations also 
serves as the text of the proposed regulations set forth in this notice 
of proposed rulemaking. This document also provides a notice of public 
hearing on these proposed regulations.

DATES: Written or electronic comments must be received by September 17, 
2012. Outlines of topics to be discussed at the public hearing 
scheduled for October 18, 2012, at 10 a.m., must be received by 
September 27, 2012.

ADDRESSES: Send submissions to CC:PA:LPD:PR (REG-141832-11), Room 5205, 
Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 
Washington, DC 20044. Submissions may be hand-delivered Monday through 
Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-
141832-11), Courier's Desk, Internal Revenue Service, 1111 Constitution 
Avenue NW., Washington, DC; or sent electronically via the Federal 
eRulemaking Portal at https://www.regulations.gov (IRS-REG-141832-11). 
The public hearing will be held in the IRS Auditorium, Internal Revenue 
Building, 1111 Constitution Avenue NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, 
Karlene Lesho at (202) 622-3090; concerning the submission of comments, 
the hearing, or to be placed on the building access list to attend the 
hearing, Oluwafunmilayo Taylor at (202) 622-7180 (not toll-free 
numbers).

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act

    The collection of information contained in this notice of proposed 
rulemaking has been approved by the Office of Management and Budget, in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), under Form 706, ``United States Estate (and Generation-
Skipping Transfer) Tax Return,'' and assigned control number 1545-0015.
    Comments on the collection of information should be sent to the 
Office of Management and Budget, Attn: Desk Officer for the Department 
of the Treasury, Office of Information and Regulatory Affairs, 
Washington, DC 20503, with copies to the Internal Revenue Service, 
Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 
20224. Comments on the collection of information should be received by 
August 17, 2012. Comments are specifically requested concerning:
    Whether the proposed collection of information is necessary for the 
proper performance of the functions of the IRS, including whether the 
information will have practical utility;
    The accuracy of the estimated burden associated with the proposed 
collection of information;
    How the quality, utility, and clarity of the information to be 
collected may be enhanced;
    How the burden of complying with the proposed collections of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology; and
    Estimates of capital or start-up costs of operation, maintenance, 
and purchase of service to provide information.
    The collection of information in this proposed regulation is in 
proposed Sec. Sec.  20.2010-2(a), 20.2010-2(a)(1), 20.2010-2(a)(3)(i), 
20.2010-2(a)(7)(ii)(B), and 20.2010-2(b). The information in Sec. Sec.  
20.2010-2(a), 20.2010-2(a)(1), and 20.2010-2(b) as it affects estates 
not otherwise required to file an estate tax return under section 
6018(a) is necessary in order for an executor of a decedent's estate to 
elect portability of a DSUE amount to the surviving spouse. The 
information in Sec.  20.2010-2(a)(3)(i) is necessary in order for an 
executor of a decedent's estate to signify that the estate is not 
electing portability of a DSUE amount to the surviving spouse. The 
information in Sec.  20.2010-2(a)(7)(ii)(B) is necessary in order to 
evaluate whether an estate qualifies for a special rule relating to 
applicable estate tax return requirements. The collection of 
information is voluntary to obtain a benefit. The likely respondents 
are executors of estates of decedents having a date of death in 2011 or 
2012 or any subsequent period in which portability of a DSUE amount is 
in effect.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid control number assigned by the Office of 
Management and Budget.
    Books or records relating to a collection of information must be 
retained as long as their contents may become material in the 
administration of any internal revenue law. Generally, tax returns and 
tax return information are confidential, as required by 26 U.S.C. 6103.

Background

    The temporary regulations in the Rules and Regulations section of 
this issue of the Federal Register make additions to the Estate Tax 
Regulations (26 CFR part 20) under sections 2001 and 2010 of the 
Internal Revenue Code (Code) and Gift Tax Regulations (26 CFR part 25) 
under section 2505 of the Code. The temporary regulations provide 
guidance on the estate and gift tax applicable credit amount under 
sections 2010 and 2505 of the Code. In addition, the temporary 
regulations provide guidance on the portability of a deceased spousal 
unused exclusion (DSUE) amount under section 2010(c) of the Code, 
including the applicable requirements for electing portability of a 
DSUE amount to the surviving spouse,

[[Page 36230]]

for computing the deceased spouse's DSUE amount, and for the surviving 
spouse's use of the DSUE amount. The text of those regulations also 
serves as the text of these regulations. The preamble to the temporary 
regulations explains the temporary regulations and these proposed 
regulations.

Special Analyses

    It has been determined that this notice of proposed rulemaking is 
not considered a significant regulatory action as defined in Executive 
Order 12866, as supplemented by Executive Order 13563. Therefore, a 
regulatory flexibility assessment is not required. In addition, section 
553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does 
not apply to these regulations. It is hereby certified that the 
collection of information contained in this regulation will not have a 
significant economic impact on a substantial number of small entities. 
This certification is based on the fact that these regulations 
primarily affect estates of a decedent which generally are not small 
entities under the Act. Thus, we do not expect a substantial number of 
small entities to be effected. Therefore, a Regulatory Flexibility 
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is 
not required. Pursuant to section 7805(f) of the Code, this notice of 
proposed rulemaking has been submitted to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on its impact 
on small business.

Comments and Public Hearing

    Before these proposed regulations are adopted as final regulations, 
consideration will be given to any written comments (a signed original 
and eight (8) copies) or electronic comments that are submitted timely 
to the IRS as prescribed in this preamble under the ADDRESSES heading. 
The IRS and the Treasury Department request comments on all aspects of 
the proposed rules. All comments will be available at 
www.regulations.gov or for public inspection and copying.
    A public hearing has been scheduled for October 18, 2012, in the 
IRS auditorium, Internal Revenue Building, 1111 Constitution Avenue 
NW., Washington, DC. Due to building security procedures, visitors must 
enter at the Constitution Avenue entrance. In addition, all visitors 
must present photo identification to enter the building. Because of 
access restrictions, visitors will not be admitted beyond the immediate 
entrance more than 30 minutes before the hearing starts. For 
information about having your name placed on the building access list 
to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section 
of this preamble.
    The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who 
wish to present oral comments at the hearing must submit electronic or 
written comments (a signed original and eight (8) copies) and an 
outline of the topics to be discussed and the time to be devoted to 
each topic by September 27, 2012. A period of 10 minutes will be 
allotted to each person for making comments. An agenda showing the 
scheduling of the speakers will be prepared after the deadline for 
receiving outlines has passed. Copies of the agenda will be available 
free of charge at the hearing.

Drafting Information

    The principal author of these regulations is Karlene Lesho, Office 
of the Associate Chief Counsel (Passthroughs and Special Industries). 
Other personnel from the IRS and the Treasury Department participated 
in their development.

List of Subjects

26 CFR Part 20

    Estate taxes, Reporting and recordkeeping requirements.

26 CFR Part 25

    Gift taxes, Reporting and recordkeeping requirements.

Proposed Amendments to the Regulations

    Accordingly, 26 CFR parts 20 and 25 are proposed to be amended as 
follows:

PART 20--ESTATE TAX; ESTATE OF DECEDENTS DYING AFTER AUGUST 16, 
1954

    Paragraph 1. The authority citation for part 20 is amended by 
adding entries in numerical order to read as follows:

    Authority: 26 U.S.C. 7805. * * *
    Section 20.2010-0 also issued under 26 U.S.C. 2010(c)(6).
    Section 20.2010-1 also issued under 26 U.S.C. 2010(c)(6).
    Section 20.2010-2 also issued under 26 U.S.C. 2010(c)(6).
    Section 20.2010-3 also issued under 26 U.S.C. 2010(c)(6). * * *

    Par. 2. Section 20.2001-2 is added to read as follows:


Sec.  20.2001-2  Valuation of adjusted taxable gifts for purposes of 
determining the deceased spousal unused exclusion amount of last 
deceased spouse.

    [The text of the proposed amendments to Sec.  20.2001-2(a) and (b) 
is the same as the text of Sec.  20.2001-2T(a) and (b) published 
elsewhere in this issue of the Federal Register].
    Par. 3. Section 20.2010-0 is added to read as follows:


Sec.  20.2010-0  Table of contents.

    [The entries in the table of contents for the proposed amendments 
to Sec.  20.2010-0 are the same as the entries in the table of contents 
for Sec.  20.2010-0T published elsewhere in this issue of the Federal 
Register].
    Par. 4. Section 20.2010-1 is added to read as follows:


Sec.  20.2010-1  Unified credit against estate tax; in general.

    [The text of the proposed amendments to Sec.  20.2010-1(a) through 
(e) is the same as the text of Sec.  20.2010-1T(a) through (e) 
published elsewhere in this issue of the Federal Register].
    Par. 5. Section 20.2010-2 is added to read as follows:


Sec.  20.2010-2  Portability provisions applicable to estate of a 
decedent survived by a spouse.

    [The text of the proposed amendments to Sec.  20.2010-2(a) through 
(e) is the same as the text of Sec.  20.2010-2T(a) through (e) 
published elsewhere in this issue of the Federal Register].
    Par. 6. Section 20.2010-3 is added to read as follows:


Sec.  20.2010-3  Portability provisions applicable to the surviving 
spouse's estate.

    [The text of the proposed amendments to Sec.  20.2010-3(a) through 
(f) is the same as the text of Sec.  20.2010-3T(a) through (f) 
published elsewhere in this issue of the Federal Register].

PART 25--GIFT TAX; GIFTS MADE AFTER DECEMBER 31, 1954

    Par. 7. The authority citation for part 25 is amended by adding an 
entry in numerical order to read as follows:

    Authority: 26 U.S.C. 7805.
    Section 25.2505-2T also issued under 26 U.S.C. 2010(c)(6). * * *

    Par. 8. Section 25.2505-0 is added to read as follows:


Sec.  25.2505-0  Table of contents.

    [The entries in the table of contents for the proposed amendments 
to Sec.  25.2505-0 are the same as the entries in the table of contents 
for Sec.  25.2505-0T published elsewhere in this issue of the Federal 
Register].
    Par. 9. Section 25.2505-1 is added to read as follows:


Sec.  25.2505-1  Unified credit against gift tax; in general.

    [The text of the proposed amendments to Sec.  25.2505-1(a) through

[[Page 36231]]

(e) is the same as the text of Sec.  25.2505-1T(a) through (e) 
published elsewhere in this issue of the Federal Register].
    Par. 10. Section 25.2505-2 is added to read as follows:


Sec.  25.2505-2  Gifts made by a surviving spouse having a DSUE amount 
available.

    [The text of the proposed amendments to Sec.  25.2505-2(a) through 
(g) is the same as the text of Sec.  25.2505-2T(a) through (g) 
published elsewhere in this issue of the Federal Register].

Steven T. Miller,
Deputy Commissioner for Services and Enforcement.
[FR Doc. 2012-14775 Filed 6-15-12; 8:45 am]
BILLING CODE 4830-01-P