Portability: Preserving a Deceased Spouse's Unused Exclusion in Florida

What it is

Every person has a federal basic exclusion amount, $15,000,000 for deaths and gifts in 2026 (26 U.S.C. § 2010(c)(3)). A surviving spouse's exclusion is the sum of his or her own basic exclusion amount and the "deceased spousal unused exclusion amount," called the DSUE amount (26 U.S.C. § 2010(c)(2)). Portability is the name for carrying that unused amount over to the survivor.

The DSUE amount is the lesser of the basic exclusion amount or the deceased spouse's exclusion that was not used, meaning the deceased spouse's applicable exclusion amount minus the taxable estate and adjusted taxable gifts (26 U.S.C. § 2010(c)(4); Treas. Reg. § 20.2010-2(c)(1)). As a hypothetical example, if a spouse dies in 2026 leaving $2 million to the children and everything else to the surviving spouse, the marital deduction covers the spouse's share, and the DSUE amount would generally be $13 million. The survivor could then use his or her own exclusion plus that $13 million.

Portability requires an election. The DSUE amount can be used only if the executor of the deceased spouse's estate files an estate tax return computing it and makes the election on that return (26 U.S.C. § 2010(c)(5)(A)). The election is irrevocable, and no election may be made on a return filed after the deadline, including extensions (26 U.S.C. § 2010(c)(5)(A)). Filing a complete and properly prepared Form 706 makes the election unless the executor opts out (Treas. Reg. § 20.2010-2(a)(2)). This is true even when the estate owes no tax and would not otherwise have to file. For an estate that was not otherwise required to file, the IRS treats the deadline as one set by regulation, which is why late relief can be available (Treas. Reg. § 20.2010-2(a)(1); Rev. Proc. 2022-32, § 3.03).

The deadline is the same as a required return: nine months after the date of death, or the end of an extension (Treas. Reg. § 20.2010-2(a)(1); 26 U.S.C. § 6075(a)). Filing Form 4768 by the due date gives an automatic six-month extension (Treas. Reg. § 20.6081-1(b)). For estates that file only to elect portability, the regulations reduce the work: the executor need not report values for property passing to the spouse or to charity in most cases, but must report a good-faith estimate of the total gross estate (Treas. Reg. § 20.2010-2(a)(7)(ii)).

Portability has limits. The DSUE amount comes from the survivor's "last" deceased spouse (26 U.S.C. § 2010(c)(4)(B)(i)), so a later marriage and the death of a second spouse can change what the survivor may use. Portability also does not carry over the GST exemption, which equals only the basic exclusion amount (26 U.S.C. § 2631(c)). And the IRS may examine the deceased spouse's return to verify the DSUE amount even after the usual limitations period has run (26 U.S.C. § 2010(c)(5)(B)), so the first spouse's estate records should be kept. See our Florida estate tax planning page for how portability compares with a credit shelter trust.

When the Surviving Spouse Should File for Portability

Electing portability usually costs far less than losing it. Filing is worth serious consideration when:

• The couple's combined assets, including life insurance, retirement accounts, and real estate, could grow above one person's exclusion during the survivor's lifetime.
• The survivor is relatively young, may receive an inheritance, or owns assets expected to appreciate.
• The survivor may remarry. Portability is tied to the last deceased spouse, so the DSUE from the first spouse is available only while that rule allows it.
• The first spouse left most assets outright to the survivor, so little of the first spouse's exclusion was used.
• The survivor wants to make large lifetime gifts. The DSUE amount can be applied to gifts as well as to the survivor's estate.
• Your spouse died within the last five years, no Form 706 was filed, and the estate was below the filing threshold. A late election may still be available.

If the estate was large enough that a Form 706 was required under 26 U.S.C. § 6018(a), the late election in Rev. Proc. 2022-32 is not available, and the original deadline controls.

Late Elections Under Rev. Proc. 2022-32

Rev. Proc. 2022-32 gives a simplified way to make a late portability election. It is available when the deceased spouse was a U.S. citizen or resident who died after December 31, 2010, survived by a spouse; the estate was not required to file under 26 U.S.C. § 6018(a) based on the gross estate and adjusted taxable gifts; and no timely Form 706 was filed (Rev. Proc. 2022-32, § 3.01). Section 6018(a) requires a return when the gross estate exceeds the basic exclusion amount, reduced by adjusted taxable gifts.

The executor, appointed or non-appointed, must file a complete and properly prepared Form 706 on or before the fifth anniversary of the date of death, with this statement at the top: "FILED PURSUANT TO REV. PROC. 2022-32 TO ELECT PORTABILITY UNDER § 2010(c)(5)(A)." (Rev. Proc. 2022-32, § 4.01). No user fee is required. If the five-year window has passed, the remaining route is a request for a private letter ruling under Treas. Reg. § 301.9100-3 (Rev. Proc. 2022-32, § 3.04).

A late election does not reopen closed refund periods. If the surviving spouse has already paid gift or estate tax that the DSUE amount would have reduced, a refund is available only if a claim is filed within the normal refund period, and a protective claim may be filed in anticipation of the late election (Rev. Proc. 2022-32, §§ 5.01–5.02).

Why work with an attorney

Portability is often lost because no one realizes a return is needed when no tax is due. Within a Florida probate or trust administration, the personal representative or trustee is focused on creditors, real estate, and distributions, and the nine-month federal deadline can pass unnoticed. Yergey & Yergey, P.A. has handled Florida probate and trust matters in Orlando since 1928, and David A. Yergey III holds an LL.M. in Taxation from the University of Alabama School of Law. We identify whether portability should be elected, confirm who may sign as executor, and coordinate the Form 706 with your CPA and with the trust administration or probate.