Tax Brief Issue 4: Estate Portability & OZ Changes

01. Estate Portability Election Extensions

• The IRS may grant an extension under § 301.9100-3 for estates not otherwise required to file an estate tax return to make a portability election, typically requiring Form 706 to be filed within 120 days of the IRS letter date.
• An extension of time for a portability election granted under § 301.9100-3 is null and void if it is later determined that the estate was required to file an estate tax return under § 6018(a).

Source: IRS Written Determinations · 2026-05-15

02. Opportunity Zone Rule Changes (OBBBA)

• The One, Big, Beautiful Bill Act (OBBBA) amended IRC Section 1400Z-1 to narrow the definition of a Low-Income Community (LIC) and eliminate the contiguous tract rule for Qualified Opportunity Zone (QOZ) designations made after July 4, 2025.
• New Qualified Opportunity Zones (QOZs) will be designated effective January 1, 2027, and for property acquired after December 31, 2026, the definition of Qualified Opportunity Zone Business Property (QOZBP) under §1400Z-2(d)(2)(D) now references the QOZ's applicable start date instead of December 31, 2017.

Source: IRS Internal Revenue Bulletin · 2026-05-11

03. Late S Corporation Section 336(e) Election Relief

• The IRS granted an S corporation an extension to make a late Section 336(e) election, citing the taxpayer's reasonable reliance on a qualified tax professional under § 301.9100-3.
• Following an extension for a late election, amended returns reflecting the election must generally be filed within 120 days of the extension letter date.

Source: IRS Written Determinations · 2026-05-15