2007 Connecticut Estate and Gift .2007 FORM CT-706/709 Connecticut Estate and Gift Tax Return and

  • View
    212

  • Download
    0

Embed Size (px)

Text of 2007 Connecticut Estate and Gift .2007 FORM CT-706/709 Connecticut Estate and Gift Tax Return and

  • 2007FORMCT-706/709

    ConnecticutEstate and Gift TaxReturn and Instructions

    This bookletcontains:

    Form CT-706/709

    Form CT-706/709 EXT

    ScheduleCT-709 Farmland

    Taxpayer information is available on our website:www.ct.gov/DRS

    Department of Revenue Services walk-in locations and telephone numbers are listed on the back cover.

    Dear Taxpayer:

    The 2007 CT-706/709, Connecticut Estate and Gift Tax Return,and instructions contained in this booklet explain what taxpayersmust do to conform to the states gift and estate tax laws. Schedule Bon the return is where taxpayers must report all Connecticut taxablegifts given since January 1, 2005, even if no gift tax is due. Taxablegifts continue to accumulate over the lifetime of the giver; however,tax is not payable until the collective total of taxable gifts and taxableestate is valued at more than $2 million. These and other details areincluded in this booklet. Please read it carefully.

    Providing taxpayers with clear, accurate information helps theDepartment of Revenue Services (DRS) achieve its mission ofvoluntary taxpayer compliance. If you have questions about filingthis return, or any Connecticut taxes issues, you can reach DRSTaxpayer Services staff by email, phone, or letter. The back coverof this booklet lists all the ways you can access this Agency. TheDRS website at www.ct.gov/DRS contains new frequently-askedquestions, which are available anytime to provide you helpful facts,forms, and publications. The website also contains information aboutvarious electronic filing options available for personal and businesstaxes.

    We welcome your comments and ideas about how we can improveour products and better serve the public.

    Sincerely,

    Pam LawCommissioner of Revenue Services

  • 2

    Some Important Information .......................... 3Civil Unions ............................................................ 3Connecticut Gift Tax Overview ................................ 3Connecticut Estate Tax Overview .......................... 3

    Tax Table for Form CT-706/709.......................4General Information ....................................... 5

    How to Get Help .................................................... 5How to Get Forms and Publications ...................... 5Recordkeeping ....................................................... 5Copies of Returns .................................................. 5Rounding Off to Whole Dollars ............................... 5Private Delivery Services ........................................ 5Where to File ......................................................... 5Interest and Penalties ............................................ 5Declaration ............................................................ 6

    Getting Started ............................................... 6Section 1 - Gift Tax ................................................ 6Section 2 - Estate Tax ........................................... 6

    Section 1 - Gift Tax ......................................... 6Steps to Completing Section 1 - Gift Tax ............... 6

    Step One Determine whether you arerequired to file a federal gift tax return ............. 6

    Step Two Determine whether you arerequired to file a Connecticut gift tax return .... 6

    Residence ............................................................. 7Person Responsible for Filing Return

    and Paying Tax ................................................... 7Financial Disability ................................................ 7When to File .......................................................... 7Extension Requests .............................................. 7

    Comparison Between Federal Gift Taxand Connecticut Gift Tax ............................ 8Gifts ....................................................................... 8Exclusions and Deductions ................................... 8Valuation ............................................................... 8Gift Splitting ........................................................... 8No Joint Gift Tax Return ......................................... 9Applicable Credit Amount ....................................... 9

    Gifts of Farmland .......................................... 10Transfers of Farmland or Change of

    Classification ......................................................10Due Date of Additional Tax Liability .......................10Recordkeeping ......................................................10

    Gift Tax Instructions forForm CT-706/709 ......................................... 11General Instructions .............................................. 11Line Instructions ................................................... 11Payment Information ............................................. 11

    Who Must Sign the Return ................................... 11Paid Preparer Information ..................................... 11Mailing Your Return .............................................. 11

    Schedule A - Overview................................. 12General Instructions ..............................................12Contributions to Qualified State Tuition

    Programs............................................................12Gifts to Your Spouse .............................................12Gift Splitting With Your Spouse .............................12Terminable Interests ..............................................12Life Estate With Power of Appointment .................12Election to Deduct Qualified 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 ...... 15

    Amended Gift Tax Returns .......................... 16

    Section 2 - Estate Tax .................................. 17Steps to Completing Section 2 - Estate Tax .........17

    Which Estates Must File With DRS ..................17Which Estates Must Not File With DRS............17

    Residence ............................................................17Release of Estate Tax Lien Required for Sale of

    Connecticut Real Property .................................17Executor ...............................................................17When to File .........................................................17Who Must File ......................................................17Amended Estate Tax Returns ...............................17

    Estate Tax Instructions forForm CT-706/709 ........................................ 18General Instructions ..............................................18Credits ..................................................................18Supporting Documentation ....................................18Line Instructions ...................................................18Payment Information .............................................19Paid Preparer Information .....................................19Mailing Your Return ..............................................19

    Schedule Instructions forForm CT-706/709 ........................................ 19Schedule C - Estate Tax Deduction ........................19Schedule D - Estate Tax Credits (Resident

    Estates Only) .....................................................20Schedule E - Computation of Tax for

    Nonresident Decedent Estate ............................20

    Table of Contents

  • 3

    Civil UnionsChapter 815f of the Connecticut General Statutes authorizessame-sex couples to enter into civil unions and grants toparties in a civil union recognized under Connecticut law(civil union partners) the same benefits and protectionsunder Connecticut law that are granted to spouses in amarriage. This treatment first applies for Connecticut gifttax purposes to gifts made on or after January 1, 2006,and first applies for Connecticut estate tax purposes toestates of decedents dying on or after January 1, 2006.

    For gifts made on or after January 1, 2006, and for estatesof decedents dying on or after January 1, 2006, thefollowing Connecticut gift and estate tax provisions, whichare available to spouses in a marriage, are available to civilunion partners:

    Marital deduction: A Connecticut marital deduction isallowable for property passing from a donor or decedentto his or her civil union partner to the same extent thatproperty transferred to a husband or wife or survivingspouse is allowable as a marital deduction, provided therequirements of Internal Revenue Code (I.R.C.) 2523for gifts and 2056 for bequests are otherwise met.

    Because civil unions are not recognized for federal taxpurposes, civil union partners who elect a maritaldeduction for Connecticut gift tax or estate tax purposesare required to submit with the Form CT-706/709,Connecticut Estate and Gift Tax Return, filed with theDepartment of Revenue Services (DRS): (1) a pro formafederal Form 709 or Form 706, completed as if federaltax law allowed a marital deduction to civil union partners,which reflects the marital deductions taken by the civilunion partners; and (2) a copy of the federal Form 709or Form 706 (whichever is applicable) that was actuallyfiled with the Internal Revenue Service (IRS).

    Joint property: Civil union partners are allowed toinclude 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, providedthe interest in property otherwise meets the requirementsof I.R.C. 2040(b)(2).

    Gift Splitting: Spouses are eligible for federal gift taxpurposes to elect to gift-split. Where