Bill Text: MN HF1886 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Federal estate and gift tax exemption amount conformity provided.
Spectrum: Partisan Bill (Republican 14-0)
Status: (Introduced - Dead) 2014-03-10 - Author added Pugh [HF1886 Detail]
Download: Minnesota-2013-HF1886-Introduced.html
1.2relating to taxation; estate and gift; conforming to the federal exemption
1.3amount; amending Minnesota Statutes 2013 Supplement, sections 289A.10,
1.4subdivision 1; 291.005, subdivision 1; 291.03, subdivision 1; 292.17, subdivision
1.52; repealing Minnesota Statutes 2013 Supplement, sections 289A.10, subdivision
1.61a; 289A.12, subdivision 18; 289A.18, subdivision 3a; 289A.20, subdivision
1.73a; 291.03, subdivisions 8, 9, 10, 11.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2013 Supplement, section 289A.10, subdivision 1,
1.10is amended to read:
1.11 Subdivision 1. Return required. In the case of a decedent who has an interest in
1.12property with a situs in Minnesota, the personal representative must submit a Minnesota
1.13estate tax return to the commissioner, on a form prescribed by the commissioner, if:
1.14(1) a federal estate tax return is required to be filed; or
1.15(2) the sum of the federal gross estate and federal adjusted taxable gifts made within
1.16three years of the date of the decedent's death exceeds $1,000,000.
1.17The return must contain a computation of the Minnesota estate tax due. The return
1.18must be signed by the personal representative.
1.19EFFECTIVE DATE.This section is effective for estates of decedents dying after
1.20June 30, 2013.
1.21 Sec. 2. Minnesota Statutes 2013 Supplement, section 291.005, subdivision 1, is
1.22amended to read:
1.23 Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
1.24terms used in this chapter shall have the following meanings:
2.1 (1) "Commissioner" means the commissioner of revenue or any person to whom the
2.2commissioner has delegated functions under this chapter.
2.3 (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
2.4and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
2.5 (3) "Internal Revenue Code" means the United States Internal Revenue Code of
2.61986, as amended through January 3, 2013, but without regard to the provisions of section
2.72011, paragraph (f), of the Internal Revenue Code.
2.8 (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
2.9defined by section 2011(b)(3) of the Internal Revenue Code, plus
2.10(i) the amount of deduction for state death taxes allowed under section 2058 of
2.11the Internal Revenue Code; and
2.12(ii) the amount of taxable gifts, as defined in section292.16 , and made by the
2.13decedent within three years of the decedent's date of death; less.
2.14(iii)(A) the value of qualified small business property under section
291.03,
2.15subdivision 9
, and the value of qualified farm property under section
291.03, subdivision
2.1610
, or (B) $4,000,000, whichever is less.
2.17 (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
2.18excluding therefrom any property included therein which has its situs outside Minnesota,
2.19and (b) including therein any property omitted from the federal gross estate which is
2.20includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
2.21authorities.
2.22 (6) "Nonresident decedent" means an individual whose domicile at the time of
2.23death was not in Minnesota.
2.24 (7) "Personal representative" means the executor, administrator or other person
2.25appointed by the court to administer and dispose of the property of the decedent. If there
2.26is no executor, administrator or other person appointed, qualified, and acting within this
2.27state, then any person in actual or constructive possession of any property having a situs in
2.28this state which is included in the federal gross estate of the decedent shall be deemed
2.29to be a personal representative to the extent of the property and the Minnesota estate tax
2.30due with respect to the property.
2.31 (8) "Resident decedent" means an individual whose domicile at the time of death
2.32was in Minnesota.
2.33 (9) "Situs of property" means, with respect to:
2.34 (i) real property, the state or country in which it is located;
2.35 (ii) tangible personal property, the state or country in which it was normally kept
2.36or located at the time of the decedent's death or for a gift of tangible personal property
3.1within three years of death, the state or country in which it was normally kept or located
3.2when the gift was executed; and
3.3 (iii) intangible personal property, the state or country in which the decedent was
3.4domiciled at death or for a gift of intangible personal property within three years of death,
3.5the state or country in which the decedent was domiciled when the gift was executed.
3.6 For a nonresident decedent with an ownership interest in a pass-through entity
3.7with assets that include real or tangible personal property, situs of the real or tangible
3.8personal property is determined as if the pass-through entity does not exist and the real
3.9or tangible personal property is personally owned by the decedent. If the pass-through
3.10entity is owned by a person or persons in addition to the decedent, ownership of the
3.11property is attributed to the decedent in proportion to the decedent's capital ownership
3.12share of the pass-through entity.
3.13(10) "Pass-through entity" includes the following:
3.14(i) an entity electing S corporation status under section 1362 of the Internal Revenue
3.15Code;
3.16(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
3.17(iii) a single-member limited liability company or similar entity, regardless of
3.18whether it is taxed as an association or is disregarded for federal income tax purposes
3.19under Code of Federal Regulations, title 26, section301.7701 -3; or
3.20(iv) a trust to the extent the property is includible in the decedent's federal gross estate.
3.21EFFECTIVE DATE.This section is effective for estates of decedents dying after
3.22June 30, 2013.
3.23 Sec. 3. Minnesota Statutes 2013 Supplement, section 291.03, subdivision 1, is
3.24amended to read:
3.25 Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the
3.26proportion of the maximum credit for state death taxes computed under section 2011
3.27of the Internal Revenue Code, but without regard to section 2011, paragraph (f), and
3.28using Minnesota adjusted taxable estate instead of federal adjusted taxable estate, as the
3.29Minnesota gross estate bears to the value of the federal gross estate. The tax is reduced by:
3.30 (1) the gift tax paid by the decedent under section292.17 on gifts included in the
3.31Minnesota adjusted taxable estate and not subtracted as qualified farm or small business
3.32property; and
3.33 (2) any credit allowed under subdivision 1c.
4.1 (b) The tax determined under this subdivision must not be greater than the sum of
4.2the following amounts multiplied by a fraction, the numerator of which is the Minnesota
4.3gross estate and the denominator of which is the federal gross estate:
4.4 (1) the rates and brackets under section 2001(c) of the Internal Revenue Code, as
4.5amended through December 31, 2000, multiplied by the sum of:
4.6 (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus
4.7 (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
4.8Code; less
4.9(iii) the lesser of (A) the sum of the value of qualified small business property
4.10under subdivision 9, and the value of qualified farm property under subdivision 10, or
4.11(B) $4,000,000; less
4.12 (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
4.13Code; and less
4.14 (3) the federal credit allowed under section 2010 of the Internal Revenue Code and
4.15including the credit attributable to the deceased spousal unused exclusion amount.
4.16(c) For purposes of this subdivision, "Internal Revenue Code" means the Internal
4.17Revenue Code of 1986, as amended through December 31, 2000.
4.18EFFECTIVE DATE.This section is effective for estates of decedents dying after
4.19June 30, 2013.
4.20 Sec. 4. Minnesota Statutes 2013 Supplement, section 292.17, subdivision 2, is
4.21amended to read:
4.22 Subd. 2. Lifetime credit. A credit is allowed against the tax imposed under this
4.23section equal to$100,000 ten percent of the applicable exclusion amount, including
4.24the inflation adjustment and deceased spousal unused exclusion amount, under section
4.252010(c) of the Internal Revenue Code. This credit applies to the cumulative amount of
4.26taxable gifts made by the donor during the donor's lifetime.
4.27EFFECTIVE DATE.This section is effective for estates of decedents dying after
4.28June 30, 2013.
4.29 Sec. 5. REPEALER.
4.30Minnesota Statutes 2013 Supplement, sections 289A.10, subdivision 1a; 289A.12,
4.31subdivision 18; 289A.18, subdivision 3a; 289A.20, subdivision 3a; and 291.03,
4.32subdivisions 8, 9, 10, and 11, are repealed.
5.1EFFECTIVE DATE.This section is effective for decedents dying after June 30,
5.22013.
1.3amount; amending Minnesota Statutes 2013 Supplement, sections 289A.10,
1.4subdivision 1; 291.005, subdivision 1; 291.03, subdivision 1; 292.17, subdivision
1.52; repealing Minnesota Statutes 2013 Supplement, sections 289A.10, subdivision
1.61a; 289A.12, subdivision 18; 289A.18, subdivision 3a; 289A.20, subdivision
1.73a; 291.03, subdivisions 8, 9, 10, 11.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2013 Supplement, section 289A.10, subdivision 1,
1.10is amended to read:
1.11 Subdivision 1. Return required. In the case of a decedent who has an interest in
1.12property with a situs in Minnesota, the personal representative must submit a Minnesota
1.13estate tax return to the commissioner, on a form prescribed by the commissioner, if
1.14
1.15
1.16
1.17The return must contain a computation of the Minnesota estate tax due. The return
1.18must be signed by the personal representative.
1.19EFFECTIVE DATE.This section is effective for estates of decedents dying after
1.20June 30, 2013.
1.21 Sec. 2. Minnesota Statutes 2013 Supplement, section 291.005, subdivision 1, is
1.22amended to read:
1.23 Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
1.24terms used in this chapter shall have the following meanings:
2.1 (1) "Commissioner" means the commissioner of revenue or any person to whom the
2.2commissioner has delegated functions under this chapter.
2.3 (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
2.4and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
2.5 (3) "Internal Revenue Code" means the United States Internal Revenue Code of
2.61986, as amended through January 3, 2013, but without regard to the provisions of section
2.72011, paragraph (f), of the Internal Revenue Code.
2.8 (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
2.9defined by section 2011(b)(3) of the Internal Revenue Code, plus
2.10(i) the amount of deduction for state death taxes allowed under section 2058 of
2.11the Internal Revenue Code; and
2.12(ii) the amount of taxable gifts, as defined in section
2.13decedent within three years of the decedent's date of death
2.14
2.15
2.16
2.17 (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
2.18excluding therefrom any property included therein which has its situs outside Minnesota,
2.19and (b) including therein any property omitted from the federal gross estate which is
2.20includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
2.21authorities.
2.22 (6) "Nonresident decedent" means an individual whose domicile at the time of
2.23death was not in Minnesota.
2.24 (7) "Personal representative" means the executor, administrator or other person
2.25appointed by the court to administer and dispose of the property of the decedent. If there
2.26is no executor, administrator or other person appointed, qualified, and acting within this
2.27state, then any person in actual or constructive possession of any property having a situs in
2.28this state which is included in the federal gross estate of the decedent shall be deemed
2.29to be a personal representative to the extent of the property and the Minnesota estate tax
2.30due with respect to the property.
2.31 (8) "Resident decedent" means an individual whose domicile at the time of death
2.32was in Minnesota.
2.33 (9) "Situs of property" means, with respect to:
2.34 (i) real property, the state or country in which it is located;
2.35 (ii) tangible personal property, the state or country in which it was normally kept
2.36or located at the time of the decedent's death or for a gift of tangible personal property
3.1within three years of death, the state or country in which it was normally kept or located
3.2when the gift was executed; and
3.3 (iii) intangible personal property, the state or country in which the decedent was
3.4domiciled at death or for a gift of intangible personal property within three years of death,
3.5the state or country in which the decedent was domiciled when the gift was executed.
3.6 For a nonresident decedent with an ownership interest in a pass-through entity
3.7with assets that include real or tangible personal property, situs of the real or tangible
3.8personal property is determined as if the pass-through entity does not exist and the real
3.9or tangible personal property is personally owned by the decedent. If the pass-through
3.10entity is owned by a person or persons in addition to the decedent, ownership of the
3.11property is attributed to the decedent in proportion to the decedent's capital ownership
3.12share of the pass-through entity.
3.13(10) "Pass-through entity" includes the following:
3.14(i) an entity electing S corporation status under section 1362 of the Internal Revenue
3.15Code;
3.16(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
3.17(iii) a single-member limited liability company or similar entity, regardless of
3.18whether it is taxed as an association or is disregarded for federal income tax purposes
3.19under Code of Federal Regulations, title 26, section
3.20(iv) a trust to the extent the property is includible in the decedent's federal gross estate.
3.21EFFECTIVE DATE.This section is effective for estates of decedents dying after
3.22June 30, 2013.
3.23 Sec. 3. Minnesota Statutes 2013 Supplement, section 291.03, subdivision 1, is
3.24amended to read:
3.25 Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the
3.26proportion of the maximum credit for state death taxes computed under section 2011
3.27of the Internal Revenue Code, but without regard to section 2011, paragraph (f), and
3.28using Minnesota adjusted taxable estate instead of federal adjusted taxable estate, as the
3.29Minnesota gross estate bears to the value of the federal gross estate. The tax is reduced by:
3.30 (1) the gift tax paid by the decedent under section
3.31Minnesota adjusted taxable estate and not subtracted as qualified farm or small business
3.32property; and
3.33 (2) any credit allowed under subdivision 1c.
4.1 (b) The tax determined under this subdivision must not be greater than the sum of
4.2the following amounts multiplied by a fraction, the numerator of which is the Minnesota
4.3gross estate and the denominator of which is the federal gross estate:
4.4 (1) the rates and brackets under section 2001(c) of the Internal Revenue Code, as
4.5amended through December 31, 2000, multiplied by the sum of:
4.6 (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus
4.7 (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
4.8Code; less
4.9
4.10
4.11
4.12 (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
4.13Code; and less
4.14 (3) the federal credit allowed under section 2010 of the Internal Revenue Code and
4.15including the credit attributable to the deceased spousal unused exclusion amount.
4.16
4.17
4.18EFFECTIVE DATE.This section is effective for estates of decedents dying after
4.19June 30, 2013.
4.20 Sec. 4. Minnesota Statutes 2013 Supplement, section 292.17, subdivision 2, is
4.21amended to read:
4.22 Subd. 2. Lifetime credit. A credit is allowed against the tax imposed under this
4.23section equal to
4.24the inflation adjustment and deceased spousal unused exclusion amount, under section
4.252010(c) of the Internal Revenue Code. This credit applies to the cumulative amount of
4.26taxable gifts made by the donor during the donor's lifetime.
4.27EFFECTIVE DATE.This section is effective for estates of decedents dying after
4.28June 30, 2013.
4.29 Sec. 5. REPEALER.
4.30Minnesota Statutes 2013 Supplement, sections 289A.10, subdivision 1a; 289A.12,
4.31subdivision 18; 289A.18, subdivision 3a; 289A.20, subdivision 3a; and 291.03,
4.32subdivisions 8, 9, 10, and 11, are repealed.
5.1EFFECTIVE DATE.This section is effective for decedents dying after June 30,
5.22013.
