NEW YORK

ESTATE TAX

Tax imposed; resident decedents.-A tax equal to the percentages hereinafter shown of the value of the net estate is imposed upon the transfer of the net estate of every person dying after September 1, 1930, who, at the time of death was a resident of this State; but net estates which, after deducting the exemptions allowed, do not exceed $2,000 are not taxable. (249−n)

Credit allowed. This tax is credited with the amount of any estate, inheritance, legacy or succession taxes actually paid to any State or Territory of the United States or to the District of Columbia in respect of any property included in the gross estate of the decedent, but the amount so credited is not to exceed the amount of tax imposed by this act in respect of property on which the tax to be credited was imposed. This credit is only allowed if such taxes are actually paid and claim for credit is made within 3 years after date of decedent's death, although the tax commission may extend the period for payment of such taxes and for making such claim. (249-0)

Rates of tax. The normal rates imposed under this act are equal to 80 percent of the rates imposed under the Federal estate tax act,2 but these normal rates have been superseded by temporary rates, which temporary rates affect the net estate of every resident dying prior to July 1, 1939. The following schedule shows the temporary rates now being imposed, as well as the normal rates applicable to net estates of residents dying after June 30, 1939: (249-n)

Federal credit absorbed. Notwithstanding any other provisions of law, there is imposed upon the transfer of the net estate of every resident decedent a tax equal to the maximum credit allowable to the estate of such decedent against the Federal estate tax imposed with respect thereto, except that proper reduction of the amount of such tax is made on account of any real or tangible personal property forming a part of the gross estate of such decedent which is located outside of this State; but the provisions of this paragraph are not to have the effect of reducing the tax otherwise imposed by this State. (249-n)

Tax imposed; nonresident decedents.-A tax is imposed upon the transfer of so much of the net estate of every person dying on or after September 1, 1930, who, at the time of death, was a nonresident of this State, as consists of real property situated and tangible personal property having an actual situs in this State, the amount of which tax is determined as follows: Ascertain the amount of tax payable by a resident decedent with all his property (except real property situated and tangible personal property having an actual situs outside this State) situated or located within this State, and multiply the net tax so ascertained by a fraction, the denominator of which is the value of the gross estate and the numerator of which is the gross estate value of the real property situated and the tangible personal property having an actual situs in this State. The product is the amount of tax payable to this State, and no credit is allowed against such tax. (249-p)

Exemptions. Any tax on the amount of the net estate not in excess of $150,000 is not payable with respect to (a) the amount of the net estate not exceeding $20,000 transferred to a husband or wife; (b) the amount of the net estate, not exceeding $5,000 in each instance, transferred to a lineal ancestor or descendant, adopted child or stepchild or lineal descendant of either, brother, sister, wife or widow of a son or husband or widower of a daughter, or to any mutually acknowledged child; and (c) so much of the proceeds of insurance policies (shown under (9) of the paragraph "Gross estate") as does not exceed $100,000 less the aggregate of any exemptions allowable under this paragraph. (249-q)

Gross estate. To determine the value of the "gross estate," the items to be included are specifically set forth in the act, but in presenting these items, numerous conditions and limitations are necessarily omitted from this digest. The value of the "gross estate" of a decedent is determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated (except real property situated and tangible personal property having an actual situs outside this State) to the extent (1) of decedent's interest therein at the time of his death; (2) of any interest therein of the surviving spouse, existing at such death, as dower, curtesy, or any estate in lieu thereof; (3) of any interest therein of which decedent has made a transfer, by trust or otherwise, in contemplation of or intended to take effect in possession or enjoyment at or after his death, or of which he has made such a transfer under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death (a) the possession or enjoyment of, or the right to the income from, the property, or (b) the right, either alone or in conjunction with any

person, to designate the persons who shall possess or enjoy the property or the income therefrom, except in case of a bona fide sale. (249-r) Same. Such value is also included to the extent (4) of any interest therein of which the decedent has made a transfer (except in case of a bona fide sale) by trust or otherwise, where the enjoyment thereof was subject at the date of his death to any change through the exercise of any power by the decedent alone or in conjunction with any other person, to alter, amend, revoke, or terminate, or where any such power is relinquished in contemplation of decedent's death; (5) of any interest held therein as joint tenants by the decedent and any other person, or as tenants by the entirety by the decedent and spouse, or deposited in their joint names and payable to either or the survivor, except that part which originally belonged to the other person and was never acquired by him from the decedent for less than an adequate consideration; (6) of any personal property belonging to a husband which passes to his widow by virtue of her survivorship because of the husband having placed such property in his and his wife's names with intent to create a right of survivorship in her. (249-r)

Same. Such value is further included to the extent (7) of any property passing under a general power of appointment exercised by the decedent (a) by will, or (b) by deed executed in contemplation of, or intended to take effect in possession or enjoyment at or after, his death, or (c) by deed under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death (1) the possession or enjoyment of, or the right to the income from, the property, or (2) the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom, except in case of a bona fide sale; and (7a) to the extent of any property passing under such a power so exercised by such a will or by such a deed mentioned under (a) and (b) above, except in case of a bona fide sale, exclusive of property the value of which is required to be included pursuant to (7) of this paragraph, and provided that the transfer is not or was not subject to a death tax in the estate of the grantor of such power but would have been so taxable except for a statute providing that the tax on the transfer should be imposed in the estate of the grantee of such power in the event of the exercise thereof. (249-r)

Same. Such value is determined by including, also, (8) the amount receivable by the executor as insurance under policies taken out by the decedent upon his own life; and (9) the amount receivable by all other beneficiaries as insurance under policies taken out by the decedent upon his own life, but only to the extent that such amount is required to be included in the gross estate under the provisions for the taxing of estates in any Federal revenue act applicable to the estate of the decedent. (249-r)

Net estate. The value of the "net estate" is determined by deducting from the value of the "gross estate" the amounts for items specifically enumerated, but numerous conditions and limitations attached thereto are necessarily omitted from this digest. The deductions so allowed include amounts for funeral expenses, for perpetual care of decedent's burial lot, and suitable monumental work to be erected thereon; administration expenses and claims against the estate; unpaid mortgages upon, or any indebtedness in respect to, property

where the value of decedent's interest therein, undiminished by such mortgage as indebtedness, is included in the value of the gross estate; expenses for the support during the settlement of the estate of those dependent upon the decedent; losses incurred during such settlement from casualties or from theft, when not compensated for by insurance or otherwise, and if such losses have not been claimed as an income tax deduction; but if allowed as a deduction hereunder, they are not allowed as an income tax deduction. (249-s)

Same. Such deductions so allowed include an amount equal to the value of any property (a) forming a part of the gross estate situated in the United States of any person who died within 5 years prior to the death of the decedent, or (b) transferred to the decedent by gift, bequest, devise, or inheritance within 5 years prior to his death, where such property can be identified as having been received by the decedent from the donor by gift, or from such prior decedent by gift, bequest, devise, or inheritance, or which can be identified as having been acquired in exchange for property so received. Deductions under this paragraph are allowed to the extent and under conditions specifically set out in this act. (249-s)

Same. There are also allowed as deductions the amount of all bequests, legacies, devises, or transfers to or for the use of the United States, any State, Territory, or political subdivision thereof, or the District of Columbia, for exclusively public purposes, or to or for the use of any corporation operated for religious, charitable, scientific, literary, patriotic, historical, bar association, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, and to a fraternal society. The amount of the deduction under this paragraph for any transfer is not to exceed the value of the transferred property required to be included in the gross estate. (249–8)

Filing returns.-The surrogate directs the county appraiser to fix the fair market value of property of estates subject to this tax; and the executor is required to file his return within 60 days after the entry of such order directing the appraisal, unless such time is extended by the appraiser. (249-v)

Payment of tax; discount; interest.-This tax is due at the time of the decedent's death. In counties having In counties having a salaried appraiser, payment is made to the State tax commission; in other counties, payment is made to the county treasurers. If the tax is paid within 6 months from date of death, a discount of 5 percent is allowed; if not so paid, such discount rate is reduced by subtracting one-half of 1 percent each month after the expiration of such 6 months, until such discount is exhausted. If the tax is not paid within 18 months from date of death, interest is charged at the rate of 10 percent per annum from date of death, except that if the total of the tax exceeds 5 percent of the net estate, the tax commission is required to, and it may in other cases where it finds payment in 18 months would impose an undue hardship, extend the time for payment to not exceeding 4 years from the due date, and may require payment to be made in annual installments. If the time for payment is extended, the extended portion of the tax bears interest at the rate of 6 percent per annum after the expiration of 18 months from the due date to the expiration of the period of extension; but if payment is not made within the period of extension, interest is charged at the rate of 10 percent per annum

from date of death until date of payment. If time for payment has not been extended and the tax is subject to the 10 percent interest rate, the commission may reduce such rate to 6 percent if the tax cannot be determined by reason of some unavoidable cause of delay, but such reduction is for the period only during which such cause of delay was operative. (249-z)

Tax lien. Every tax levied under this act is and remains a lien upon the property transferred until paid, except that the tax commission has power to release the lien with respect to all or any part of such property, if it be satisfied that the collection of the tax will not thereby be jeopardized, and the executor of every estate is personally liable for such tax until its payment. (249-bb)

Disposition of proceeds. The proceeds of this tax are paid into the State treasury and are applicable to the expenses of the State government and to such other purposes as the legislature directs. (249–jî) Administration of act.-The State tax commission administers the provisions of this act. (249-gg)

Source of information.-Article 10C of the Tax Law, Baldwin's Consolidated Laws of New York, Annotated, 1938.