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Declaratory Rulings

State of Rhode Island - Division of Taxation

Declaratory Rulings

Ruling Request No. 2003-03

 

Request for Ruling Relating to Election of Marital Deduction for Qualified Terminable Interest Property ("QTIP")

On behalf of your client you request a ruling regarding the administration of the Rhode Island Estate Tax Law as it relates to the election of a marital deduction for qualified terminable interest property ("QTIP") for Rhode Island estate tax purposes. Specifically you ask whether for decedents dying on or after January 1, 2002, may an executor or other fiduciary elect a marital deduction for qualified terminable interest property (":QTIP") for Rhode Island estate tax purposes but not for federal estate tax purposes?

Discussion

The federal estate tax act was amended by the Economic Growth and Tax Relief Reconciliation Act of 2001,phasing out the federal credit for state death taxes under section 2001 and to raise the exemption amounts under section 2010.

Rhode Island General Law §44-22-1.1(a)(2) imposes a tax on the net estate of decedents dying on or after January 1, 2002. This tax is equal to the maximum credit for state death taxes allowed by 26 USC§2011, as the latter section was in effect on January 1, 2001, but holding the unified exemption to $675,000.00.

Ruling Requested

For decedents dying on or after January 1, 2002, an executor or other fiduciary may elect a marital deduction for QTIP property for Rhode Island estate tax purposes. The executor or other fiduciary is not required to have made the same QTIP election for federal estate tax purposes in order to make the election for Rhode Island purposes.

Ruling

For decedents dying on or after January 1, 2002 and executor or other fiduciary may elect a marital deduction for qualified terminable interest property ("QTIP") under U.S.Code section 2056(B))7) under Rhode Island General Laws §44-22-1.1 (references to the US Code are those that were in effect on January 1, 2001).

The code in effect on January 1, 2001, (adopted under Rhode Island General Laws §44-22-1.1) allows an estate tax marital deduction for QTIP property provided the requirements of Code Section 2056(B)(7) are met and therefore a marital deduction for Rhode Island estate tax purposes will be allowed. Section 2044 of the federal Code in effect on January 1, 2001, included the value of QTIP property in the gross estate of the surviving spouse and that same result will occur for Rhode Island estate tax purposes.

This ruling provides the executor or other fiduciary to make an election that becomes irrevocable and separate from and independent of any election made by the executor or other fiduciary for federal estate tax purposes.

This ruling shall be valid until expressly revoked or until the applicable statutory provisions of law are amended in a manner that requires a different result

R. GARY CLARK
TAX ADMINISTRATOR
APRIL 16, 2003