Federal Estate Tax Portability (DSUE) Calculator

How this calculator works

The federal estate-and-gift tax is unified under IRC § 2010(c). One lifetime applicable exclusion covers both taxable gifts a person makes during life (reported on Form 709) and the taxable estate at death (reported on Form 706). Any amount of cumulative taxable transfers above the exclusion is subject to a flat 40% federal estate-tax rate under IRC § 2001(c). The single most consequential planning move for married couples is the deceased spousal unused exclusion ("DSUE") portability election under IRC § 2010(c)(4) — the ability to carry over the predeceased spouse's unused exclusion to the surviving spouse via a timely-filed Form 706.

This calculator models four primary outputs:

1. Applicable exclusion in effect — the inflation-adjusted basic exclusion for the tax year, with a toggle for the post-TCJA-sunset scenario.
2. Taxable estate — gross estate minus the marital deduction (IRC § 2056), charitable deduction (IRC § 2055), and administration deductions (IRC §§ 2053–2054).
3. DSUE available — the unused portion of the decedent's exclusion that could be ported to the surviving spouse via a timely Form 706 portability election under Treas. Reg. § 20.2010-2.
4. Federal estate tax owed and Form 706 filing deadline — the 40% tax computation under IRC § 2001(c) and the 9-month deadline (extendable to 15 months with Form 4768).

The 2026 exclusion: $14.45M, with sunset risk

The 2017 Tax Cuts and Jobs Act (TCJA § 11061) roughly doubled the federal estate-and-gift-tax basic exclusion from approximately $5.49M (the 2017 baseline) to approximately $11.18M, indexed annually for inflation. By 2024 the inflation-indexed exclusion had grown to $13.61M per individual. In 2025 it rose to $13.99M. In 2026 the estimated inflation-adjusted figure is approximately $14.45M per individual — the pre-sunset baseline used by this calculator.

The TCJA doubling was scheduled to sunset on January 1, 2026 — reverting the exclusion to roughly $7M per individual (the inflation-adjusted 2017 baseline). Whether Congress acted to extend the doubling is the central uncertainty of 2026 federal estate planning. The assumePostSunsetRates toggle in this calculator models both scenarios:

• Pre-sunset (default): $14.45M per individual; a married couple shelters approximately $28.9M via portability.
• Post-sunset (toggle on): $7M per individual; a married couple shelters approximately $14M via portability.

The planning band most affected by sunset risk is families with combined wealth between $7M and $14.45M. Above $14.45M, federal estate tax is owed under either regime; below $7M, the estate fits within the post-sunset exclusion either way. Inside the band, the same estate-plan structure may produce zero federal tax (pre-sunset) or substantial federal tax (post-sunset). Run both scenarios.

DSUE portability: the most powerful planning tool for married couples

The DSUE rule under IRC § 2010(c)(4) is straightforward in concept and procedurally exacting in execution. When the first spouse dies:

1. Compute the decedent's basic exclusion (the year-of-death inflation-indexed amount — $14.45M in 2026 pre-sunset).
2. Compute the applicable credit used — the cumulative lifetime taxable gifts plus the taxable estate at death.
3. DSUE = basic exclusion − applicable credit used, floor of zero.

The surviving spouse's applicable exclusion then becomes their own basic exclusion plus the DSUE from the predeceased spouse. For a couple with combined wealth approaching the exclusion, this materially doubles the shelter against estate tax at the second death — at no cost beyond the Form 706 filing fee and attorney time.

The procedural catch under Treas. Reg. § 20.2010-2(a)(2): portability is not automatic. The DSUE is forfeited unless a Form 706 is timely filed, regardless of whether any estate tax is owed at the first death. The election is made on Form 706 itself by reporting the DSUE amount in Part 6 of the return. The conservative practice for any married couple with combined wealth approaching the basic exclusion is to file Form 706 at the first death even when zero tax is owed.

A relief valve exists: Rev. Proc. 2022-32 provides a 5-year late-election window for estates that were not otherwise required to file Form 706. The late-election procedure is more forgiving than the original 9-month deadline, but it is not automatic — the estate must affirmatively elect under the Rev. Proc. and document why the election was not originally made. Relying on the late-election relief is risky planning.

Worked example: $5M estate with full portability

Take a Florida couple. Husband (H) dies on May 15, 2026 with a gross estate of $5M. The estate plan leaves $4M to the surviving spouse (W) under the unlimited marital deduction (IRC § 2056) and $1M to the couple's children. No prior taxable gifts. No charitable bequests. No significant administration deductions. Pre-sunset exclusion applies.

The calculator returns:

• Applicable exclusion: $14,450,000.
• Taxable estate: $5M gross − $4M marital deduction = $1,000,000.
• Federal estate tax owed: $0 (taxable estate plus prior gifts of $1M is well below the $14.45M exclusion).
• DSUE available: $14.45M − $1M = $13,450,000.
• Form 706 required: Yes — to elect portability and preserve the $13.45M DSUE for W.
• Filing deadline: February 15, 2027 (9 months from death).
• Extended deadline: August 15, 2027 (15 months with Form 4768).

The headline planning insight: even though zero federal estate tax is owed at H's death, the family must file Form 706 to preserve the $13.45M DSUE for W. If they skip the filing, W loses the porting opportunity and is left with only her own basic exclusion (whatever it is at her later death). Filing Form 706 to elect portability typically costs $5,000 to $15,000 in attorney and CPA fees — trivial against the value of porting $13.45M of exclusion.

When W later dies (say in 2035), her applicable exclusion will be her own basic exclusion plus the $13.45M DSUE from H. If her own basic exclusion is around $20M by 2035 (continued inflation indexing), her total shelter is approximately $33.45M. Without the portability election at H's death, the shelter would be $20M only — a difference that could expose $13.45M of W's estate to a 40% tax ($5.38M of avoidable federal estate tax).

Worked example: $15M estate, with vs without portability

A wealthier couple. Same fact pattern, but H's gross estate is $15M with $4M to W (marital) and $11M to children. No prior gifts. Pre-sunset exclusion.

Without optimal structuring:

• Taxable estate = $15M − $4M = $11M.
• Cumulative transfers = $11M (no prior gifts).
• Applicable credit used = $11M (below the $14.45M exclusion).
• Federal estate tax owed = $0 (still below the exclusion).
• DSUE available = $14.45M − $11M = $3.45M.

W must file Form 706 to preserve the $3.45M DSUE. When W later dies, her shelter is her own basic exclusion plus $3.45M.

With optimal structuring (larger marital deduction, e.g., a QTIP trust funding strategy):

• If the estate plan leaves $12M to W via a QTIP under IRC § 2056(b)(7) and $3M to children:
• Taxable estate = $15M − $12M = $3M.
• Applicable credit used = $3M.
• Estate tax owed = $0.
• DSUE = $14.45M − $3M = $11.45M.

The post-mortem planning move — qualified disclaimers under IRC § 2518, QTIP elections, even Clayton-style elections — can materially increase the marital deduction at the first death, reduce the credit consumed by the decedent's estate, and maximize the DSUE ported to the surviving spouse. The trade-off is that QTIP'd assets remain in the surviving spouse's estate (taxed at her death), but with portability the combined exclusion typically shelters everything at the second death too.

The Form 706 9-month deadline mechanics

Form 706 is due 9 months from the date of death under Treas. Reg. § 20.6075-1. A 6-month automatic extension of the FILING deadline is available by timely-filing Form 4768 on or before the 9-month deadline — bringing the total available filing window to 15 months. The extension is for the filing only; any estate tax actually owed remains due at 9 months, with interest accruing from that date.

The deadline math runs by month, not by day-counting: a May 15 death yields a February 15 filing deadline; a January 31 death yields a clamped October 31 filing deadline (or the last day of the month if the target month is shorter). The calculator uses end-of-month clamping consistent with the IRS practice.

For estates near or above the exclusion, missing the 9-month deadline triggers late-filing penalties under IRC § 6651 (typically 5% per month, capped at 25%) plus late-payment penalties on any tax owed. For estates filing Form 706 SOLELY to elect portability (no tax owed), Rev. Proc. 2022-32 provides a 5-year late-election relief — but the relief requires affirmative election language and procedural compliance, and the conservative practice remains filing within the original 9-month window.

The unlimited marital deduction under IRC § 2056

Under IRC § 2056(a), any amount passing to a US-citizen surviving spouse is deductible from the gross estate without limit. This is the structural reason a married couple can pass everything to the surviving spouse with zero federal estate tax at the first death. Two important boundary conditions:

• Non-citizen surviving spouse (IRC § 2056(d)): the unlimited deduction does NOT apply. Bequests to a non-citizen surviving spouse qualify for the marital deduction only if they pass through a qualified domestic trust (QDOT) under IRC § 2056A — which imposes a US-resident trustee requirement and a recapture mechanism. Without a QDOT, the marital deduction is limited to approximately $100,000 per year. Pre-death naturalization, QDOT planning, or restructuring to bring the gross estate below the exclusion are the principal planning moves.

• Terminable interests: outright bequests qualify; life estates and income interests qualify only if a QTIP election under IRC § 2056(b)(7) is made on the Form 706. The QTIP must give the spouse a qualifying income interest for life and meet other procedural requirements. QTIP'd property is included in the surviving spouse's gross estate at her death, so it is a deferral, not an elimination — but combined with portability, the QTIP/DSUE structure typically shelters everything at the second death.

State estate taxes — Florida has none, but 12 other jurisdictions do

Florida imposes no state estate tax, no state inheritance tax, and no state income tax on individuals. Florida-resident decedents are exposed only to the federal estate-and-gift-tax described here.

Twelve other jurisdictions still impose a separate state estate tax: Connecticut, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. The state exclusions are typically much lower than the federal — Massachusetts and Oregon have used a $1M state exclusion (Massachusetts raised to $2M in 2023); Washington's is approximately $2.193M. State estate tax is a separate engagement from federal portability planning and is generally NOT portable between spouses (with limited exceptions).

For a Florida-resident decedent with no state-tax exposure, the federal portability analysis is the entire story. For a Florida decedent with out-of-state real property in a state-tax jurisdiction, ancillary administration in the situs state typically triggers state estate-tax filing requirements on the situs-state assets.

Generation-skipping transfer (GST) tax — separate exemption, NOT portable

The GST tax under IRC §§ 2601 et seq. is a separate federal transfer tax that applies to gifts or bequests to grandchildren (or more remote descendants) and certain unrelated younger-generation beneficiaries. The GST exemption parallels the estate-and-gift-tax exclusion in dollar amount ($14.45M in 2026 pre-sunset), but the GST exemption is NOT portable to a surviving spouse. Each spouse has a separate GST exemption that is used or lost at their death.

Dynasty trusts, generation-skipping gifts, and GST-exempt structures must be coordinated separately from portability planning. The GST exemption must be allocated on the Form 706 (estate) or Form 709 (gift) using the IRC § 2632 allocation rules. A common error: assuming the DSUE election at the first death also ports unused GST exemption — it does not.

Valuation discounts and special-use valuation

Valuation is at fair market value at the date of death under IRC § 2031 and Treas. Reg. § 20.2031, but several special rules reduce includible value:

• IRC § 2032A — special-use valuation for qualified family-owned farms and closely-held business real estate, reducing the includible value by up to roughly $1.39M per estate (indexed).
• Family-limited-partnership (FLP) and family LLC minority-interest and lack-of-marketability discounts under regular IRC § 2031 fair-market-value principles — typically 20% to 40% combined on closely-held interests.
• Built-in capital gains discounts on appreciated property where the estate inherits a § 1014 stepped-up basis.

Each discount requires substantial documentation, a qualified appraisal, and (often) post-mortem litigation risk. Estates with closely-held business interests, family-farm real estate, or FLP structures should engage a federal-estate-tax attorney and a qualified business appraiser before filing Form 706. In fact-specific cases, valuation discounts can move an estate from over-exclusion to under-exclusion.

Common errors to avoid

• Missing the 9-month Form 706 deadline. The DSUE is forfeited (subject only to Rev. Proc. 2022-32 late-election relief, which is not guaranteed). File even when zero tax is owed.
• Forgetting the non-citizen-spouse limitation under IRC § 2056(d). The unlimited marital deduction does not apply; QDOT planning is required.
• Skipping Form 706 because no estate tax is owed. Without the filing, no portability election can be made; the surviving spouse loses the DSUE.
• Assuming the GST exemption is portable. It is not; allocate separately on Form 706.
• Ignoring state estate-tax filing obligations. Florida has none, but 12 other jurisdictions do; out-of-state real property triggers ancillary state-tax filing.
• Treating the 2026 sunset as definitive in either direction. Run both pre-sunset and post-sunset scenarios for estates in the $7M–$14.45M band.

What this calculator does not do

• Replace counsel. Federal estate-tax planning, Form 706 preparation, and portability elections are procedurally exacting and substantively complex. Engage a federal-estate-tax attorney and a CPA experienced with Form 706.
• Compute state estate tax. Florida has none; 12 other jurisdictions impose one and require separate analysis.
• Compute GST tax. The generation-skipping transfer tax is a separate analysis with its own exemption that is not portable.
• Compute valuation discounts. § 2032A special-use, FLP discounts, and minority-interest valuations require qualified appraisals.
• Model the QDOT mechanics for non-citizen surviving spouses. QDOT structuring requires specialized counsel.
• Predict whether the TCJA sunset will actually take effect. Run both scenarios.

The calculator's outputs are planning-stage estimates. For estates near or above the applicable exclusion, engage federal-estate-tax counsel and a CPA before any disposition or filing.