Estate Deductions, Credits, and Form 706
Learn the decision pattern the exam can test, then apply it to a realistic taxpayer fact pattern.
What changes the answer?
An estate may file to make a portability election even when no transfer tax is due.
A tax-practice scenario
A surviving spouse's estate is below the ordinary filing threshold but wants to preserve unused exclusion. Identify the filing decision and deadline.
Identify the taxpayer, entity, transaction, and tax period first. Write the controlling tests in order, apply only the relevant facts, and keep the reporting result separate from any planning recommendation.
Do not take this shortcut.
Assuming no tax due always means no strategic reason to file Form 706.
Turn the rule into recall.
Create a filing-decision memo covering threshold, portability, elections, valuation, and extensions.
- ExplainState the governing distinction without notes.
- ApplyChange one fact in the scenario and predict the new result.
- RetrieveAnswer an unseen question, then review every option.
Official source and scope
This lesson follows the current PSI content outline and uses the IRS reference below for the underlying tax or practice framework. Always confirm current forms, instructions, thresholds, and effective dates before advising a taxpayer.