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ct-706-709book

ct-706-709book

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Published by Patricia Dillon

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Published by: Patricia Dillon on Jun 28, 2011
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10/07/2012

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2010
FORMCT-706/709
Connecticut
Estate and Gift Tax
Return and Instructions
This booklet contains:
•FormCT-706/709•FormCT-706/709EXT•Schedule
 
CT-709Farmland
Taxpayer informationis available on our website:
www.ct.gov/DRS
The 2010 Connecticutestate and gift taxbooklet should be used
toreportConnecticuttaxablegiftsmadeduringcalendaryear2010andtocomputetheConnecticut
estate tax on the estates
ofdecedentsdyingduringthecalendaryear2010.
 
Page 2
SomeImportantInformation
........................ 3
Repeal of Federal Estate Tax Has No Effect onConnecticut Estate Tax Liability ........................ 3Civil Unions and Marriages RecognizedUnder Public Act 2009-13 ................................. 3DRS Policy on Cooperative Units ......................... 4Connecticut Gift Tax Overview ............................. 4Connecticut Estate Tax Overview ......................... 5
GeneralInformation
...................................... 6
How to Get Help ................................................... 6How to Get Forms and Publications ..................... 6Recordkeeping ..................................................... 6Copies of Returns ................................................ 6Rounding Off to Whole Dollars ............................. 6Private Delivery Services ..................................... 6Where to File ........................................................ 6Interest and Penalties .......................................... 6Waiver of Penalty ................................................. 7Declaration ........................................................... 7
GettingStarted
............................................... 7
Section 1 - Gift Tax ............................................... 7Section 2 - Estate Tax .......................................... 7
Section1-GiftTax
........................................ 7
Steps to Completing Section 1 - Gift Tax .............. 7Residence ............................................................ 8Person Responsible for Filing Returnand Paying Tax ................................................. 8Financial Disability ............................................... 8When to File ......................................................... 8Extension Requests ............................................. 8
ComparisonBetweenFederalGiftTax
 and Connecticut Gift Tax ........................... 9
Gifts ...................................................................... 9Exclusions and Deductions .................................. 9Valuation ............................................................... 9Gift Splitting .......................................................... 9No Joint Gift Tax Return
...................................
10Applicable Credit Amount
.................................
10
GiftsofFarmland
...........................................10
Transfers of Farmland or Change of 
Classifcation
.............................................
10Due Date of Additional Tax Liability
...................
10Recordkeeping
................................................
11
GiftTaxInstructionsfor
 
FormCT-706/709
.........................................11
General Instructions
........................................
11Line Instructions
..............................................
11Payment Information
.......................................
11Who Must Sign the Return
...............................
11Paid Preparer Information
................................
12Mailing Your Return
.........................................
12
ScheduleA-Overview
..................................12
General Instructions
........................................
12
Contributions to Qualifed State Tuition
 Programs
....................................................
12Gifts to Your Spouse
........................................
12Gift Splitting With Your Spouse
.........................
12Terminable Interests
........................................
12Life Estate With Power of Appointment
..............
13
Election to Deduct Qualifed Terminable
 Interest Property (QTIP)
...............................
13Charitable Remainder Trusts
............................
13
ScheduleA-ColumnInstructions
...............13
ScheduleA-LineInstructions
......................13
ScheduleB-GeneralInstructions
...............15
FormCT-706/709GiftTaxAttachments
.......16
Section2-EstateTax
....................................16
Steps to Completing Section 2 - Estate Tax
........
16Which Estates Must File With DRS
...................
16
Which Estates Must File With Probate Court Only
16Property and Proceeds Reported for Federal Estate Tax Purposes
........................
16Residence ...........................................................17Release of Estate Tax Lien Required for Sale of Connecticut Real Property
............................
17Executor 
.........................................................
17When to File
...................................................
17Who Must File
.................................................
17
EstateTaxInstructionsfor
 
FormCT-706/709
.........................................17
General Instructions
........................................
17Credits
...........................................................
17Supporting Documentation
...............................
18Line Instructions
..............................................
18Payment Information
.......................................
19Paid Preparer Information
................................
19Due Date
........................................................
19Mailing Your Return
.........................................
19
ScheduleInstructionsfor
 
FormCT-706/709
.........................................19
Schedule C - Estate Tax Deduction
...................
19Schedule D - Estate Tax Credits (ResidentEstates Only)
..............................................
20Schedule E - Computation of Tax for Nonresident Decedent Estate
.......................
20
AmendedFormCT-706/709TaxReturns
....20
Table of Contents
 
Page 3
RepealofFederalEstateTaxHasNoEffectOnConnecticutEstateTaxLiability
For Connecticut estate tax purposes, the Connecticuttaxable estate is the sum of two amounts, one of which is the gross estate less allowable deductions asdetermined under Chapter 11 of the Internal RevenueCode (IRC) (other than the deduction for state deathtaxes paid under §2058 of the IRC). The other amountis the aggregate amount of all Connecticut taxablegifts made by the decedent for all calendar years beginning on or after January 1, 2005. Conn. Gen. Stat.§12-391(c) provides that, “in the event of repeal of thefederal estate tax, then all references to the InternalRevenue Code in this section shall mean the InternalRevenue Code as in force on the day prior to the effectivedate of such repeal.” In Pub. L. No. 107-16, Congressrepealed the federal estate tax for estates of decedentsdying during 2010. Therefore, under Conn. Gen. Stat.§12-391(c), the IRC, for Connecticut estate tax purposes,is the IRC in force on December 31, 2009. While estatesof decedents dying during 2010 may or may not be subjectto federal estate tax (depending on what action Congresstakes), estates of decedents dying during 2010 for whichthe amount of the Connecticut taxable estate exceeds$3.5 million will be subject to Connecticut estate tax andwill be required, unless Congress acts to restore the federalestate tax for estates of decedents dying during 2010,to submit a pro forma federal Form 706, United StatesEstate (and Generation-Skipping Transfer) Tax Return(Rev. September 2009) along with Form CT-706/709.
CivilUnionsandMarriagesRecognizedUnderPublicAct2009-13
Connecticut estate tax rules for individuals who wereparties to a civil union or in a marriage recognized underPublic Act 2009-13 are the same Connecticut estate taxrules that apply to spouses in a marriage recognized forfederal purposes.
This treatment rst applied for Connecticut gift tax purposes
to gifts made on or after January 1, 2006, for parties toa civil union or a marriage recognized under Public Act
2009-13. The treatment rst applied for Connecticut estate
tax purposes to estates of decedents dying on or afterJanuary 1, 2006, for parties to a civil union or a marriagerecognized under Public Act 2009-13. In these situations,the following gift and estate tax provisions apply.
Marital deduction:
If any marital deduction is electedfor federal estate tax purposes, the same amount must alsobe elected for Connecticut estate tax purposes. However,an election may be made solely for Connecticut estatetax purposes to have a trust or other property of thedecedent’s gross estate treated as QTIP property only if no election was made for federal estate tax purposes underIRC §2056(b)(7) to treat a trust or other property of thedecedent’s gross estate as QTIP property. A Connecticutmarital deduction is allowable for property passing froma donor or decedent to his or her spouse, whether in acivil union or in a marriage recognized under Public Act2009-13, to the same extent that property transferred toa husband or wife or surviving spouse is allowable as amarital deduction provided the requirements of IRC §2523for gifts and §2056 for bequests are otherwise met.Because neither civil unions nor marriages recognizedunder Public Act 2009-13 are recognized for federal taxpurposes, civil union partners or spouses in a marriagerecognized under Public Act 2009-13 who elect a maritaldeduction for Connecticut gift tax or estate tax purposes
are required to submit with the Form CT-706/709 led
with the Department of Revenue Services (DRS) or the
Form CT-706 NT led with the Probate Court:
•
A pro forma federal Form 709 or Form 706 completedas if federal tax law allowed a marital deduction to civilunion partners or spouses in a marriage recognized under
Public Act 2009-13 which reects the marital deductions
taken by them;
and
•
A copy of the federal Form 709 or Form 706 (whicheveris applicable) actually filed with the Internal RevenueService (IRS).
Joint property
: Civil union partners and spouses in a
marriage recognized under Public Act 2009-13 are allowedto include in the gross estate of a decedent one-half thevalue of certain joint interests in the same manner that ahusband and wife are permitted this treatment provided theinterest in property otherwise meets the requirements of IRC §2040(b)(2).
Gift splitting
: Spouses are eligible for federal gift tax
purposes to elect to gift split. Where spouses elect to giftsplit, all gifts made by one spouse to another person orpersons are considered as made one-half by the donorand one-half by the donor’s spouse. This same election isavailable for Connecticut gift tax purposes to civil unionpartners and to spouses in a marriage recognized underPublic Act 2009-13.Because neither civil unions nor marriages recognizedunder Public Act 2009-13 are recognized for federal taxpurposes, civil union partners and spouses in a marriagerecognized under
Public Act 2009-13
who elect to gift splitfor Connecticut gift tax purposes are required to submit
with the Form CT-706/709 led with DRS:
•
A pro forma federal Form 709, completed as if federal
law allowed them to gift split, which reects the
 gift-splitting elected by the spouses;
and
•
Copies of the federal Forms 709 actually filed with theIRS.
SomeImportantInformation

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