Extension for QTIP Election Granted

Published September 26, 2025

GiftLaw Note: Decedent executed and amended a revocable trust (Trust). Decedent died and was survived by Spouse. Upon Decedent’s death, the terms of Trust provide that the trustee is to establish a Marital Farm Trust. The terms of Marital Farm Trust require all net income of Marital Farm Trust to be paid to Spouse on at least a quarterly basis and provide that the principal may be paid to or for the benefit of Spouse for necessary expenses related to maintenance, upkeep and operation of the House and Farm. The terms of the Marital Farm Trust also allow the Spouse the right to require that the trustees make unproductive trust property productive or dispose of it to invest the proceeds in productive property. Decedent’s estate employed tax professionals to prepare tax forms and make any necessary elections. Accordingly, Decedent’s estate timely filed Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, but mistakenly failed to list QTIP property on Schedule M. Decedent’s estate requested an extension of time to make a QTIP election under Sec. 301.9100-1 and Sec. 301.9100-3.
 
Under Sec. 2001(a), a tax is imposed on the transfer of the taxable estate of every U.S. decedent citizen or resident. The value of the taxable estate is determined by deducting amounts passed to the surviving spouse from the gross estate. Sec. 2056(a). Section 2056(b)(7) provides an exception for QTIP elections. To qualify for a QTIP election, the surviving spouse must have a qualifying income interest for life in the trust, payable at least annually and the trust cannot be appointed to any person other than surviving spouse. Sec. 2056(b)(7)(B)(i). The QTIP election must be made on the estate tax return. Reg. 20.2056(b)-7(b)(4)(i). Regulation 301.9100-3 allows for an extension of time to be granted if the taxpayer acted reasonably and in good faith and the relief granted will not prejudice the interests of the government. Regulation 301.9100-3(b)(1)(v) states that a taxpayer will be deemed to have acted reasonably and in good faith if the taxpayer reasonably relied on a qualified tax professional and the tax professional failed to make or advise the taxpayer to make the election. Here, the Service determined that Decedent’s estate met the requirements of Sec. 301.9100-3. The Service, therefore, granted an extension of time to make a QTIP election with respect to Marital Farm Trust.
 

PLR 202538019                     Extension for QTIP Election Granted

9/19/25 (6/16/25)

Dear * * *:

This letter responds to a letter from your authorized representative dated December 5, 2024, and subsequent correspondence, requesting an extension of time under §§301.9100-1 and 301.9100-3 of the Procedure and Administration Regulations to make a qualified terminable interest property (QTIP) election under §2056(b)(7) of the Internal Revenue Code (Code).

The facts and representations submitted are summarized as follows:

Decedent created Trust, a revocable trust, on Date 1, and amended Trust on Date 2. On Date 3, Decedent died survived by Spouse. Trust became irrevocable upon Decedent's death. Upon Decedent's death, Paragraph Sixth establishes Marital Farm Trust.

Under Paragraph Sixth of Trust, as amended, if Spouse survives Decedent, then upon Decedent's death, Trustees are to fund Marital Farm Trust with cash, securities and/or other property (to be selected by Trustees only out of assets which qualify for the marital deduction provided for by the Code) having a value equal to $x.

Trustees are directed to pay the net income of Marital Farm Trust, at least quarterly, to Spouse for life. Trustees may also make discretionary distributions of principal to Spouse as they deem necessary to pay for all utilities, real estate taxes or special assessments, property and casualty insurance, repairs, maintenance costs, operating expenses, or other expenses related to the maintenance, upkeep, and operation of House and Farm, after taking into account the income payable to Spouse from Marital Farm Trust. Further, Spouse has the right to require Trustees to make unproductive trust property productive or dispose of it and invest the proceeds in productive property within a reasonable time.

The executors of Decedent's estate engaged Tax Professional to prepare Decedent's Form 706 (United States Estate (and Generation-Skipping Transfer) Tax Return) and to make any necessary elections, including the QTIP election. The Form 706 for Decedent's estate was timely filed on Date 4; however, in Part A of Schedule M, Tax Professional mistakenly failed to include the assets of Marital Farm Trust as property subject to the QTIP election and instead listed such property as “[a]ll other property.” Thus, no QTIP election was made with respect to the property passing to Marital Farm Trust. Upon discovery that no QTIP election had been made, Decedent's estate filed a supplemental Form 706 on Date 5 to make the QTIP election.

You have requested an extension of time to make the QTIP election under §2056(b)(7).

LAW AND ANALYSIS

Section 2001(a) imposes a tax on the transfer of the taxable estate of every decedent who is a citizen or resident of the United States.

Section 2056(a) provides that, for purposes of the tax imposed by §2001, the value of the taxable estate shall, except as limited by §2056(b), be determined by deducting from the value of the gross estate an amount equal to the value of any interest in property which passes or has passed from the decedent to the surviving spouse, but only to the extent that such interest is included in determining the value of the gross estate.

Section 2056(b)(7)(A) provides that, in the case of qualified terminable interest property, for purposes of §2056(a), such property shall be treated as passing to the surviving spouse, and for purposes of §2056(b)(1)(A), no part of such property shall be treated as passing to any person other than the surviving spouse.

Section 2056(b)(7)(B)(i) defines the term “qualified terminable interest property” as property: (I) which passes from the decedent; (II) in which the surviving spouse has a qualifying income interest for life as defined in §2056(b)(7)(B)(ii); and (III) to which an election under §2056(b)(7) applies.

Section 2056(b)(7)(B)(ii) provides that the surviving spouse has a qualifying income interest for life if: (I) the surviving spouse is entitled to all the income from the property, payable annually or at more frequent intervals, or has a usufruct interest for life in the property; and (II) no person has a power to appoint any part of the property to any person other than the surviving spouse.

Section 2056(b)(7)(B)(v) provides that an election under §2056(b)(7) with respect to any property shall be made by the executor on the return of tax imposed by §2001. Such an election, once made, shall be irrevocable.

Section 20.2056(b)-7(b)(4)(i) provides that, in general, the election referred to in §2056(b)(7)(B)(i)(III) and (v) is made on the return of tax imposed by §2001 (or §2101). For purposes of this paragraph, the term “return of tax imposed by §2001” means the last estate tax return filed by the executor on or before the due date of the return, including extensions or, if a timely return is not filed, the first estate tax return filed by the executor after the due date.

Section 301.9100-1(c) provides that the Commissioner has discretion to grant a reasonable extension of time under the rules set forth in §§301.9100-2 and 301.9100-3 to make a regulatory election, or a statutory election (but no more than six months except in the case of a taxpayer who is abroad), under all subtitles of the Code except subtitles E, G, H, and I.

Section 301.9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose date is prescribed by a regulation (and not expressly provided by statute).

Requests for relief under §301.9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith, and that granting relief will not prejudice the interests of the government.

Section 301.9100-3(b)(1)(v) provides that a taxpayer is deemed to have acted reasonably and in good faith if the taxpayer reasonably relied on a qualified tax professional, including a tax professional employed by the taxpayer, and the tax professional failed to make, or advise the taxpayer to make, the election.

Based on the facts submitted and the representations made, we conclude that the requirements of §301.9100-3 have been satisfied. Accordingly, the executors of Decedent's estate are granted an extension of time to Date 5, the date the supplemental Form 706 was filed, to make a QTIP election with respect to the assets of Marital Farm Trust. A copy of this letter along with a copy of the filed supplemental Form 706 should be forwarded to: Department of the Treasury, Internal Revenue Service, Stop 824G, 7940 Kentucky Drive, Florence, KY 41042-2915.

Except as expressly provided herein, no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter. Specifically, we express or imply no opinion on whether Decedent's estate qualifies for the deduction under 2056(b)(7) with respect to Marital Farm Trust.

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the Code provides that it may not be used or cited as precedent.

The rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the request for rulings, it is subject to verification on examination.

In accordance with the Power of Attorney on file with this office, we have sent a copy of this letter to your authorized representatives.

Sincerely,

Associate Chief Counsel
Passthroughs, Trusts & Estates

By: Karlene M. Lesho
Chief, Branch 4
Office of the Associate Chief Counsel
(Passthroughs, Trusts & Estates)

Enclosure (1)
Copy for §6110 purposes