Estate gets more time for QTIP elections

Plain-English summary

An estate asked for more time to make QTIP elections for two marital trusts and a reverse QTIP election for one of them. The estate's accountant had timely filed Form 706 but mistakenly left the trusts off Schedule M, so the elections were not made. The IRS found that the estate met the late-election relief requirements and granted 120 days from the ruling date to file a supplemental Form 706 with the elections. The ruling concerns only the requested election relief and does not determine the tax consequences of the underlying transactions.

Ruling snapshot

• Question: May the estate make late QTIP and reverse QTIP elections for marital trusts?
• Outcome: Approved
• Key authorities: IRC §§ 2001, 2056, 2601, 2611, 2631, 2632, 2641, 2642, 2652, 6110; Treas. Reg. §§ 20.2056(b)-7, 26.2652-1, 26.2652-2, 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service Department of the Treasury
Washington, DC 20224

Number: 202633004 Third Party Communication: None
Release Date: 8/14/2026 Date of Communication: Not Applicable
Index Number: 2056.07-00, 2652.01-02,
9100.00-00 Person To Contact:
---------------------, ID No. -----------------
--------------------------- Telephone Number:
--------------------------------------- --------------------
--------------------------- Refer Reply To:
------------------------------ CC:PT&E:B04
--------------------------- PLR-118858-25
Date:
May 20, 2026

Legend

Decedent = --------------------------------------------
Spouse = -----------------------------------------------
Trust = ------------------------------------
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GST Exempt Marital Trust = ------------------------------------------------------------- -
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GST Non-Exempt Marital Trust = ------------------------------------------------------------ --
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Accountant = ----------------------------
Date 1 = ---------------------------
Date 2 = ----------------------
Date 3 = ----------------------
Date 4 = ----------------------

Dear ----------------:

This letter responds to a letter from your authorized representative dated September 29,
2025, 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) and a reverse QTIP election under § 2652(a)(3).

The facts and representations submitted are summarized as follows:
PLR-118858-25 2

On Date 1, Decedent and Spouse created Trust, a revocable trust. Trust was amended
and restated in its entirety on Date 2 and further amended on Date 3. Decedent died on
Date 4 and Trust became irrevocable. Decedent was survived by Spouse.

Pursuant to Article VII of Trust, upon the death of Decedent, the trustee divided Trust
into three separate trusts designated as the “Survivor’s Trust,” the “Family Trust,” and the
“Marital Trust.” The Survivor’s Trust was funded with the Spouse’s share of
Decedent’s and Spouse’s community property as well as with Spouse’s separate
property. The Family Trust was funded with a pecuniary amount equal to the maximum
sum that can be allocated to a trust without producing any federal estate tax. The
Marital Trust was for the sole benefit of Spouse and was funded with the balance of the
Trust estate.

Pursuant to Article VIII of Trust, Spouse is entitled to the entire net income of Marital
Trust, to be paid at least quarter-annually, and to discretionary distributions of principal
for support, maintenance, health and education. Spouse also has a right to withdraw
each calendar year the greater of five thousand dollars ($5,000) or five percent (5%) of
the value of the principal in Marital Trust, determined as of the end of the calendar year.
Further, Item 52 of the General Provisions Relating to Trust Administration
(Administration Provisions) provides that no underproductive or nonproductive property
may be acquired or held as an asset of Marital Trust without the express written consent
of Spouse.

Marital Trust was severed into the GST Exempt Marital Trust and the GST Non-Exempt
Marital Trust in compliance with Item 58 of the Administrative Provisions, which requires
severance of any trust created under Trust if the executor intends to allocate GST
exemption to some but not all of the property in the trust.

Spouse engaged Accountant to prepare Decedent’s Form 706, United States Estate
(and Generation-Skipping Transfer) Tax Return and to make any necessary elections.
Accountant prepared and timely filed the Form 706. On Schedule M of Form 706,
however, CPA mistakenly did not include the GST Exempt Marital Trust and GST Non-
Exempt Marital Trust as subject to the QTIP election and, therefore, no valid QTIP
election was made with respect to GST Exempt Marital Trust and GST Non-Exempt
Marital Trust, and no reverse QTIP election was made with respect to the GST Exempt
Marital Trust.

You have requested an extension of time under §§ 301.9100-1 and 301.9100-3 to make
a QTIP election with respect to GST Exempt Marital Trust and GST Non-Exempt Marital
Trust under § 2056(b)(7) and a reverse QTIP election with respect to GST Exempt
Marital Trust pursuant to § 2652(a)(3).
PLR-118858-25 3

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 2601 imposes a tax on every GST. Section 2611 provides that a GST includes
a taxable distribution, a taxable termination, and a direct skip.

Section 2602 provides that the amount of the GST tax is the taxable amount multiplied
by the applicable rate. Section 2641(a) defines “applicable rate” as the product of the
maximum federal estate tax rate and the inclusion ratio with respect to the transfer.
PLR-118858-25 4

Section 2631(a) provides that, for purposes of determining the inclusion ratio, every
individual shall be allowed a GST exemption amount which may be allocated by the
individual (or his executor) to any property with respect to which the individual is the
transferor. Section 2631(b) provides that any allocation under § 2631(a), once made,
shall be irrevocable.

Under § 2632(a), any allocation by an individual of his GST exemption may be made at
any time on or before the date prescribed for filing the individual's estate tax return
(including extensions).

Section 2632(e)(1) provides that any portion of an individual's GST exemption which
has not been allocated within the time prescribed by § 2632(a) shall be deemed to be
allocated as follows: (A) first, to property which is the subject of a direct skip occurring at
such individual's death, and (B) second, to trusts with respect to which such individual is
the transferor and from which a taxable distribution or a taxable termination might occur
at or after such individual's death.

Section 2642(a)(1) provides that, generally, the inclusion ratio with respect to any
property transferred in a GST is the excess of one over the applicable fraction
determined for the trust. Section 2642(a)(2) provides that, in general, the applicable
fraction is a fraction the numerator of which is the amount of the GST exemption
allocated to the trust and the denominator of which is the value of the property
transferred to the trust, reduced by the sum of any federal estate tax or state death tax
actually recovered from the trust attributable to such property, and any charitable
deduction allowed under § 2055 or 2522 with respect to such property.

Section 2652(a)(1) provides that for purposes of chapter 13, the term “transferor”
means: (A) in the case of any property subject to the tax imposed by chapter 11, the
decedent; and (B) in the case of any property subject to the tax imposed by chapter 12,
the donor. An individual shall be treated as transferring any property with respect to
which such individual is the transferor.

Section 2652(a)(3) provides, in pertinent part, that in the case of any trust with respect
to which a deduction is allowed to the decedent under § 2056(b)(7), the estate of the
decedent may elect to treat all of the property in such trust for GST tax purposes as if
the election to be treated as qualified terminable interest property had not been made
(“reverse” QTIP election).

Section 26.2652-2(a) of the Generation-Skipping Transfer Tax Regulations provides, in
part, that a reverse QTIP election is not effective unless it is made with respect to all of
the property in the trust to which the QTIP election applies. Section 26.2652-2(b)
provides that an election under § 2652(a)(3) is made on the return on which the QTIP
election is made.
PLR-118858-25 5

Section 26.2652-1(a)(3) provides that solely for purposes of chapter 13, if a transferor
makes a reverse QTIP election, the identity of the transferor of the property is
determined without regard to the application of §§ 2044, 2207A and 2519.

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 of 120 days from the date of this
letter to make a QTIP election under § 2056(b)(7) with respect to GST Exempt Marital
Trust and GST Non-Exempt Marital Trust and a reverse QTIP election under
§ 2652(a)(3) with respect to GST Exempt Marital Trust. The elections should be made
on a supplemental Form 706 filed with the Department of the Treasury, Internal
Revenue Service, Kansas City, MO 64999. A copy of this letter should be attached to
the supplemental Form 706.

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.

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.
PLR-118858-25 6

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,

                                            Acting Associate Chief Counsel
                                            Passthroughs, Trusts, and Estates



                                     By: ______________________________
                                         Leslie H. Finlow
                                         Senior Technician Reviewer. Branch 4
                                         Office of the Associate Chief Counsel
                                         (Passthroughs, Trusts, and Estates)

Enclosure (1):
Copy for § 6110 purposes

cc: -----------------------------------
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