Estate and gift exclusions, GST exemptions for same-sex spouses

Estate and gift exclusions, GST for same-sex spouses

The IRS today released an advance version of Notice 2017-15 concerning the treatment of the applicable exclusion amount for estate and gift tax purposes and the generation-skipping transfer (GST) exemption for gifts, bequests, and transfers by or to same-sex spouses.

1000

Related content

Notice 2017-15 [PDF 38 KB] provides special administrative procedures to allow eligible taxpayers (and the executors of eligible estates) to recalculate the remaining applicable exclusion amount and the remaining GST exemption, to the extent that an allocation of that exclusion (or exemption) was made with respect to certain transfers when the taxpayer was married to a person of the same sex.

Today’s notice provides that with respect to the applicable exclusion amount applied to a transfer between spouses that did not qualify for the marital deduction for federal estate or gift tax purposes at the time of the transfer (based solely on the application of the Defense of Marriage Act (DOMA)):

  • Eligible taxpayers will be permitted to establish that transfer’s qualification for the marital deduction and to recover the applicable exclusion amount previously applied on a return by reason of such a transfer, even if the limitations period applicable to that return for the assessment of tax or for claiming a credit or refund of tax has expired. 
  • If, however, qualification for the marital deduction or a reverse qualified terminable interest property (QTIP) election would require a QTIP, qualified domestic trust (QDOT), or reverse QTIP election, taxpayers must file a request for “9100 relief” (under Reg. section 301.9100-3) to make such an election. 

With respect to a taxpayer’s GST exemption that was allocated to transfers made, prior to the recognition of same-sex marriages for federal tax purposes, to or for the benefit of one or more persons in a same-sex marriage and/or any other person(s) whose generation assignment is determined under section 2651 with reference to a same-sex spouse, certain exemption allocations to transfers to persons now recognized to be non-skip persons as defined in section 2613(b) will be deemed void. Today’s notice clarifies that taxpayers who made such a transfer will be permitted to recalculate the amount of their remaining GST exemption. 

 

For more information, contact a tax professional with KPMG’s Washington National Tax:

Tracy Stone | +1 202 533 4186 | ttstone@kpmg.com

Irene Estrada | +1 202 533 3150 | iestrada@kpmg.com

Scott Hamm | +1 202 533 3095 | scotthamm@kpmg.com

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG International has created a state of the art digital platform that enhances your experience, optimized to discover new and related content.