HF 1271

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to estate taxation; providing for taxation of gifts made within three years
of death; amending Minnesota Statutes 2006, sections 291.005, subdivision 1;
291.03, subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 291.005, subdivision 1, is amended to read:

Subdivision 1.

Scope.

Unless the context otherwise clearly requires, the following
terms used in this chapter shall have the following meanings:

(1) "Federal gross estate" means the gross estate of a decedent as valued and
otherwise determined for federal estate tax purposes by federal taxing authorities pursuant
to the provisions of the Internal Revenue Code.

(2) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
excluding therefrom any property included therein which has its situs outside Minnesota,
and (b) including therein any property omitted from the federal gross estate which is
includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
authorities.

(3) "Personal representative" means the executor, administrator or other person
appointed by the court to administer and dispose of the property of the decedent. If there
is no executor, administrator or other person appointed, qualified, and acting within this
state, then any person in actual or constructive possession of any property having a situs in
this state which is included in the federal gross estate of the decedent shall be deemed
to be a personal representative to the extent of the property and the Minnesota estate tax
due with respect to the property.

(4) "Resident decedent" means an individual whose domicile at the time of death
was in Minnesota.

(5) "Nonresident decedent" means an individual whose domicile at the time of
death was not in Minnesota.

(6) "Situs of property" means, with respect to real property, the state or country in
which it is located; with respect to tangible personal property, the state or country in which
it was normally kept or located at the time of the decedent's death; and with respect to
intangible personal property, the state or country in which the decedent was domiciled
at death.

(7) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.

(8) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through May 18, 2006.

(9) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
defined by section 2011(b)(3) of the Internal Revenue Code, increased by new text begin :
new text end

new text begin (i) new text end the amount of deduction for state death taxes allowed under section 2058 of the
Internal Revenue Code deleted text begin . deleted text end new text begin ;
new text end

new text begin (ii) the amount of expenses which are deducted for federal income tax purposes
under section 642(g) of the Internal Revenue Code; and
new text end

new text begin (iii) the amount of taxable gifts as defined in section 2503 of the Internal Revenue
Code made by the decedent within three years of the decedent's date of death. For
purposes of this clause, the amount of the addition equals the value of the gift under
section 2512 of the Internal Revenue Code and excludes any value of the gift included in
the federal adjusted taxable estate.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for decedents dying after December
31, 2006.
new text end

Sec. 2.

Minnesota Statutes 2006, section 291.03, subdivision 1, is amended to read:

Subdivision 1.

Tax amount.

The tax imposed shall be an amount equal to the
proportion of the maximum credit for state death taxes computed under section 2011 of
the Internal Revenue Code, as amended through December 31, 2000, but using Minnesota
adjusted taxable estate instead of federal adjusted taxable estate, as the Minnesota gross
estate bears to the value of the federal gross estate. The tax determined under this
paragraph shall not be greater than the amount computed by applying the rates and
brackets under section 2001(c) of the Internal Revenue Code to the Minnesota adjusted
gross estate and subtracting the federal credit allowed under section 2010 of the Internal
Revenue Code of 1986, as amended through December 31, 2000. deleted text begin For the purposes of
this section, expenses which are deducted for federal income tax purposes under section
642(g) of the Internal Revenue Code as amended through December 31, 2002, are not
allowable in computing the tax under this chapter.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for decedents dying after December
31, 2006.
new text end