Specified Foreign Financial Assets
The Committee on Estate and Gift Taxation submitted comments to the IRS on proposed regulations which pertain to the required reporting of specified foreign financial assets (SFFA) on Form 8938. In the letter, the Committee makes a number of recommendations on the various proposals including: broadening language to exclude from the definition of specified domestic entities certain domestic trusts not required to file U.S. income tax or information returns; extending the exception to the definition of specified domestic entities for certain domestic trusts to include entities owned by the specific domestic entity; providing that a specified person is not required to report a SFFA on Form 8938 for a particular tax year if such SFFA is reported on a timely filed Form 8858 for that year; and limiting the application of the reporting requirement for certain domestic discretionary trusts.
Deceased Spousal Unused Exclusion Amount
In a joint letter to the IRS, the Committees on Trusts, Estates and Surrogate's Courts and Estate and Gift Taxation provided comments on the proposed and temporary regulations on the portability of the deceased spousal unused exclusion amount. The letter specifically suggests that the proposed regulations be modified to prevent a surviving spouse from sustaining an unfair hardship where an executor who has been appointed for the deceased spouse’s estate has not filed an estate tax return to make (or to affirmatively opt out of) a portability election as of the due date for filing the decedent’s estate tax return, and the surviving spouse has an application pending as of such filing deadline with a U.S. probate court to obtain limited letters authorizing him/her to file an estate tax return for the decedent’s estate in order to make the portability election.