In short
The marital deduction allows unlimited transfers, during life or at death, to a spouse who is a United States citizen, free of gift and estate tax. It defers the tax until the surviving spouse's death.
Key takeaways
- Terminable interests, such as a life estate, generally don't qualify unless a qualified terminable interest property (QTIP) election is made.
- Transfers to a noncitizen spouse at death qualify only through a qualified domestic trust.
- Gifts to a noncitizen spouse have a separate, larger annual exclusion instead.
Where it's tested
REG: Trusts, Estates & Gift Tax Basics — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A transfer of property to a spouse who is a U.S. citizen is: