Which concept allows the surviving spouse to receive the unused portion of the deceased spouse's exclusion?

• A. Unified credit
• B. Unlimited marital deduction
• C. Deductions
• D. Portable

Answer: (D)

Portability of the deceased spousal unused exclusion allows the surviving spouse to receive the unused portion of the deceased spouse's federal estate tax exemption. If the first-to-die spouse doesn’t use up all of their exemption, the unused amount can be transferred to the surviving spouse via a proper election on the deceased spouse’s estate tax return. The surviving spouse can then apply that transferred amount to their own exemption at their death, increasing how much can pass tax-free. The other concepts don’t provide this mechanism: the unified credit is the tax credit against the tax, unlimited marital deduction lets transfers to a spouse be tax-free but doesn’t carry forward unused exemption, and deductions are just general reductions.