Introduced Version






SENATE BILL No. 393

_____


DIGEST OF INTRODUCED BILL



Citations Affected: IC 6-4.1-3-13 ; IC 6-4.1-3-14 ; IC 6-4.1-5-1.5.

Synopsis: Inheritance tax valuation and deduction. Allows a deduction from the value of property interests transferred by a resident decedent equal to the amount of the decedent's interest in a qualified family owned business deducted from the decedent's gross estate for federal estate tax purposes under Section 2057 of the Internal Revenue Code. Provides that the finally determined federal estate tax value of a property interest is presumed to be the fair market value of the property interest for Indiana inheritance tax purposes. (The introduced version of this bill was prepared by the probate code study commission.)

Effective: July 1, 2001.





Zakas




    January 18, 2001, read first time and referred to Committee on Finance.







Introduced

First Regular Session 112th General Assembly (2001)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
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SENATE BILL No. 393



    A BILL FOR AN ACT to amend the Indiana Code concerning taxation.

Be it enacted by the General Assembly of the State of Indiana:

    SECTION 1. IC 6-4.1-3-13 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 13. (a) For purposes of this section, the term "property subject to the inheritance tax" means property transferred by a decedent under a taxable transfer.
    (b) The following items, and no others, may be deducted from the value of property interests transferred by a resident decedent under his will, under the laws of intestate succession, or under a trust:
        (1) the decedent's debts which are lawful claims against his resident estate;
        (2) taxes on the decedent's real property which is located in this state and subject to the inheritance tax, if the real property taxes were a lien at the time of the decedent's death;
        (3) taxes on decedent's personal property which is located in this state and subject to the inheritance tax, if the personal property taxes are a personal obligation of the decedent or a lien against the property and if the taxes were unpaid at the time of the decedent's death;


        (4) taxes imposed on the decedent's income to date of death, if the taxes were unpaid at the time of his death;
        (5) inheritance, estate, or transfer taxes, other than federal estate taxes, imposed by other jurisdictions with respect to intangible personal property which is subject to the inheritance tax;
        (6) mortgages or special assessments which, at the time of decedent's death, were a lien on any of decedent's real property which is located in this state and subject to the inheritance tax;
        (7) decedent's funeral expenses;
        (8) amounts, not to exceed one thousand dollars ($1,000), paid for a memorial for the decedent;
        (9) expenses incurred in administering property subject to the inheritance tax, including but not limited to reasonable attorney fees, personal representative fees, and trustee fees;
        (10) the amount of any allowance provided to the resident decedent's children by IC 29-1-4-1 ; and
        (11) the value of any property actually received by a resident decedent's surviving spouse in satisfaction of the allowance provided by IC 29-1-4-1 , regardless of whether or not a claim for that allowance has been filed under IC 29-1-14 ; and
        (12) the amount of the decedent's interest in a qualified family owned business deducted from the decedent's gross estate for federal estate tax purposes under Section 2057 of the Internal Revenue Code.

    (c) The amounts which are deductible under subsection (b)(6) of this section are deductible only from the value of the real property encumbered by the mortgage or special assessment.
    SECTION 2. IC 6-4.1-3-14 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 14. (a) Except as provided in subsection (b), the following items, and no others, may be deducted from the value of property interests which are transferred by a resident decedent but which are not transferred by the decedent's will, under the laws of intestate succession, or under a trust:
        (1) Those taxes described in section 13(b)(5) of this chapter.
        (2) Liens against the property interests that are transferred.
        (3) The decedent's debts, funeral expenses, and estate administration expenses, including reasonable attorney's fees incurred in filing the inheritance tax return.
         (4) The amount of the decedent's interest in a qualified family owned business deducted from the decedent's gross estate for federal estate tax purposes under Section 2057 of the Internal Revenue Code.
    (b) In addition, any portion of the deduction provided by section 13(b)(10) of this chapter which is not needed to reduce to zero (0) the value of the property referred to in section 13 of this chapter may be deducted from the value of any other propety property transferred by the resident decedent to the decedent's children who are entitled to the allowance provided by IC 29-1-4-1. If more than one (1) of the decedent's children are entitled to the allowance, the deduction provided by this subsection shall be divided equally among all the decedent's children who are entitled to the allowance.
    SECTION 3. IC 6-4.1-5-1.5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 1.5. (a) For purposes of determining the fair market value of each property interest transferred by a decedent, the appraisal date for the property interest is the date used to value the property interest for federal estate tax purposes. However, if no federal estate tax return is filed for the decedent's estate, the appraisal date for each property interest transferred by the decedent is the date of the decedent's death.
    (b) The finally determined federal estate tax value of a property interest is presumed to be the fair market value of the property interest for Indiana inheritance tax purposes. unless the federal estate tax value is determined under Section 2032A of the Internal Revenue Code. However, the presumption is rebuttable. A property interest that is valued for federal estate tax purposes under Section 2032A of the Internal Revenue Code shall be valued for Indiana inheritance tax purposes at its fair market value on the appraisal date prescribed by subsection (a).
    SECTION 4. [EFFECTIVE JULY 1, 2001] This act applies to the estates of persons who die after June 30, 2001.