Proposals to reform New York State’s Estate Tax
Committee Report
Proposals to reform New York State’s Estate Tax
SUMMARY
The Estate and Gift Taxation Committee (Paul A. Ferrara, Chair) and Trusts, Estates and Surrogate’s Courts Committee (John M. Oliveri, Chair) issued a report recommending a series of changes to New York’s estate tax. The committees’ recommendations include: smoothing the estate tax cliff by effectively “”extending the runway”” over which the applicable credit amount is phased out between 100% and 150% of the basic exclusion amount (instead of between 100% and 105% of the basic exclusion amount as the law currently provides); preventing the inequitable treatment of certain taxable estates where the “”addback”” of taxable gifts under N.Y. Tax Law penalizes the estate for federal estate tax purposes, by providing that the amount of any increase in New York estate tax that is attributable to such addback shall be treated as a debt of the decedent that has come into existence immediately prior to the decedents death; and permitting a separate state qualified terminable interest property (QTIP) election to be made where a federal estate tax return is being filed solely to make a portability election for federal estate tax purposes or in any other situation in which the executor would not be subject to penalties under the Internal Revenue Code of 1986, as amended, for failure to file a federal estate tax return.
