Memorandum concerning certain aspects of the 2014-15 NYS Executive Budget related to trusts and estates

SUMMARY

In a joint report, the Committees on Trusts, Estates & Surrogates Courts and Estate & Gift Taxation provided comments on certain aspects of the 2014-2015 New York State Executive Budget dated January 20, 2014. The report offers comments on the following proposals: 1) to reform the New York estate tax (i) by raising the New York estate tax exemption from $1 million to $5.25 million, subject to further indexing, and (ii) by reducing the maximum New York estate tax rate from 16% to 10%; 2) to reform the New York estate tax by permitting a separate state qualified terminable interest property election to be made where no federal estate tax return is required to be filed; 3) to eliminate the New York generation-skipping transfer tax; 4) to provide for an “addback” of taxable gifts under IRC2 § 2503 that are made on or after April 1, 2014 if the decedent was a resident of New York at the time such gift was made; 5) to subject “incomplete gift nongrantor trusts” to New York income tax by treating such trusts as grantor trusts for New York income tax purposes; and 6) to subject to New York income tax on a “throwback tax” basis “accumulation distributions” to New York resident beneficiaries from nongrantor trusts (other than “ING Trusts”) that are currently exempt from New York income tax under the “New York Resident Trust Exception,” or as nonresident trusts that do not have any New York source income. 

BILL INFORMATION

A.8559 and S.6359 (Budget Article VII) – Enacts into law major components of legislation necessary to implement the revenue budget for the 2014-2015 state fiscal year (NYS 2014)