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Hi, I was hoping you could give me some guidance.
I am legally a resident of Florida. I vote there, I have a condo there, and I own real estate in Florida. I spend approximately 4 days a month in Florida. My primary residence is in Tennessee, I have a home, businesses, real estate ect. My wife is a resident of Tennessee. I have four grown children.
How will my estate taxes, both federal and state, be handled.
Is their one state over the other that would be beneficial to be a resident of.
Thanks.
RXXXXXXXXX
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davidingram replies:
I think you are really a resident of Tennessee based upon your information and should be considering the Tennessee rules first.
4 days in Florida with a home and family in Tennessee will leave Tennessee wanting you as their resident.
However, the Florida rates can be determined as found at: http://www.myflorida.com/dor/taxes/how_estate.html
This is what you will find there:
Home Businesses Child Support Forms Government Law Property Taxes
Taxes> How Estate Tax is Calculated
Estate Tax
Estate Tax FAQ
How is the Tax Calculated?
Whom to Call
Survey Results
Seminars Offered
How is Estate Tax Calculated?
For Florida Residents
If all of the estate property was located in Florida, the amount shown as the credit for state death taxes on the federal return is the amount of Florida estate tax due. (See line 15 of federal Form 706 and Part I of Florida Form F-706.) Florida Form F-706 and payment are due at the same time the federal estate tax is due.
If any of the property was located in other states, the Florida estate tax due is adjusted to allow for the amount of any estate taxes properly paid (see definitions) to other states. Along with payment and Florida Form F-706, the personal representative must send a signed copy of federal Form 706, signed copies of other state tax returns, and proof of payment (see definitions) for estate tax paid to other states. If a credit from another state is determined to be due after the Florida estate tax is paid, this amount must be paid to the State of Florida with an amended Florida Form F-706.
For Residents of Other States
If a nonresident decedent owned Florida property, a pro rata portion of the credit for state death taxes (see Part II, Florida Form F-706) is due to Florida.
The pro rata portion of the estate tax due Florida is determined by the following formula:
Gross Value of
Florida Property1
X
Federal Credit for State Death Taxes (from Form 706, line 15)
=
Florida
Estate
Tax
--------------------------------------------------------
Gross Value of Entire Estate 2 or 3
1"Florida property" is Florida real property, tangible personal property located in Florida, stock of Florida corporations, or certain other intangible personal property.
2For U.S. residents: Includes all property in which the decedent had any interest, including property outside the United States.
3For nonresident aliens: Includes all property in the United States.
This amount is due for nonresidents regardless of the amount of estate taxes paid or to be paid to other states.
Tennessee's rules can be found at the following CCH website:
http://www.finance.cch.com/pops/c50s15d170_TN.asp
Friday, October 24, 2003
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Tennessee Estate Taxes
Tennessee imposes an inheritance tax and an estate tax that is intended to absorb the difference between the inheritance tax and the maximum credit against the federal estate tax. The inheritance tax rates on transfers are as follows:
Tennessee Inheritance Tax Rates
Value of Transferred Property After Exemption Tax on Col. 1 Rate on Excess
(1) (2) (3) (4)
$0 $40,000 $0 5.5%
$40,000 $240,000 $2,200 6.5%
$240,000 $440,000 $15,200 7.5%
$440,000 and above $30,200 9.5%
Transfers to spouses are fully exempt from tax. So are transfers to a U.S. government entity (federal, state, or local) or organizations formed for charitable, educational, or religious purposes. In addition, a single exemption amount of up to $700,000 is deducted from the estate of a decedent dying in 2003 ($850,000 in 2004; $950,000 in 2005; $1 million in 2006 and thereafter).
Deductions. The following items can be deducted from a decedent's estate when calculating Tennessee estate tax liability:
a.. decedent's debts which constitute lawful claims at death (to the extent they are not secured by property outside the state)
b.. actual funeral expenses
c.. reasonable administration expenses, including executor's and attorney's fees actually allowed and paid (not in excess of lawful rates)
d.. the federal marital deduction
e.. property taxes which are a lien at the date of death
f.. federal income taxes accrued at the date of death
g.. death duties paid or payable to other states on intangible personal property
h.. special assessments which, at the time of death, were a lien on real property within the state
i.. year's support allowance for surviving spouse or minor unmarried children
j.. appraisal fees
k.. mortgages
Returns. The personal representative or other person in possession of a decedent's property must file a copy of the will (if any), an inventory of decedent's assets, and a Tennessee estate tax return with the Commissioner of Revenue within nine months of the decedent's death. The filing obligation is not required, however, if the gross estate is less than the maximum single exemption amount (e.g., $700,000 in 2003).
Any Tennessee estate taxes owed must be paid to the Commissioner of Revenue within nine months of the decedent's death or at the end of any additional time granted for filing the inventory and return. The Commissioner, however, may allow the taxes owed to be paid in installments.
Generation-skipping transfer tax. Tennessee imposes a generation-skipping transfer tax that is equal to the federal credit
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