HF 4095

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to estate taxation; allowing Minnesota qualified terminable interest
elections; amending Minnesota Statutes 2005 Supplement, section 291.03,
subdivision 1.

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

Section 1.

Minnesota Statutes 2005 Supplement, section 291.03, subdivision 1, is
amended to read:

Subdivision 1.

Tax amount.

new text begin (a) new text end 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. 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.

new text begin (b) For purposes of computing the tax under this chapter, the executor may make
a qualified terminable interest property election, as defined in section 2056(b)(7) of
the Internal Revenue Code, that differs from the amount elected for federal estate tax
purposes. The election may not exceed the federal election by more than the difference
between the applicable exclusion amount under section 2010(c) of the Internal Revenue
Code, as amended through December 31, 2005, and under section 2010(c) of the Internal
Revenue Code, as amended through December 31, 2000. The election must be made
on the tax return under this chapter and is irrevocable. All tax under this chapter must
be determined using the qualified terminable interest election made on the Minnesota
return. For purposes of applying sections 2044 and 2207A of the Internal Revenue Code
of the computation of the federal and Minnesota gross estates of the surviving spouse,
amounts for which a qualified terminable interest property election has been made under
this section must be treated as though a valid federal qualified terminable interest property
election under section 2056(b)(7) of the Internal Revenue Code has been made.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estates of decedents dying after
December 31, 2005.
new text end