State of Rhode Island - Division of Taxation
Ruling Request No. 2009-01
Request for Ruling Regarding Eligibility for a Credit from the Estate Tax for Tax Paid on Prior Transfers
As Administrator of the Estate of X, you request a declaratory ruling relating to Estate of X's eligibility to take a tax credit for estate taxes paid on a prior transfer.
The facts set forth in your request for ruling dated July 1, 2009, and the documents attached thereto, form the basis for this ruling.
Mr. X died (Estate of X) on xx/xx/xxxx in Providence, Rhode Island. The decedent's mother (Estate of Y) died in Providence, Rhode Island on yy/yy/yyyy (nine months and nine days prior to her son). As she died intestate, all assets in her estate were to be distributed to her son. The Rhode Island Estate Tax Return (RI 100A) was filed in her estate and the amount of estate tax that was due was paid. Mr. X's estate is made up entirely from the proceeds of his mother's estate, as her estate was transferred to him. Neither estate filed a federal estate tax return (Form 706).
Declaratory Ruling Requested
Estate of X is eligible to take a tax credit for the tax already paid in the Estate of Y similar to the credit permitted on Federal Form 706, which is taken on Schedule Q of said form, pursuant to Regulation § 20.2013.1.
RIGL §44-22-1.1 provides for a tax upon the transfer of the net estate of every resident or nonresident decedent as a tax upon the right to transfer. The tax is a sum equal to the maximum credit for state death taxes allowed by 26 U.S.C. § 2011 as it was in effect as of January 1, 2001. Any scheduled increase in the unified credit provided in 26 U.S.C. § 2010 in effect on January 1, 2001, or thereafter, shall not apply.
The federal government allows a credit for tax on prior transfers under 26 U.S.C. § 2013 and Regulation § 20.2013-1. Regulation § 20.2013-1 states in part:
"A credit is allowed under section 2013 against the federal estate tax imposed on the present decedent's estate for Federal estate tax paid on the transfer of property to the present decedent from a transferor who died within ten years before, or within two years after the present decedent's death."
RIGL §44-22-1.1 provides for only one reduction or credit to the estate tax. It involves property not having a tax situs within Rhode Island. The Rhode Island Estate Tax has no credit provision for tax paid on prior transfers.
The Estate of X is not eligible to take a credit for tax paid on prior transfers. The federal credit does not apply to the Rhode Island Estate Tax and Rhode Island does not have a similar exemption of its own.
This ruling may be relied upon by the Estate of X and shall be valid until expressly revoked or until the applicable statutory provisions of law are amended in a manner that requires a different result or the underlying facts described herein change.
DAVID M. SULLIVAN
SEPTEMBER 15, 2009