18- 125 C.M.R. ch. 601, § 08

Current through 2024-51, December 18, 2024

Section 125-601-08 - Qualified terminable interest and Maine elective property

A.Qualified terminable interest property.Beginning with deaths in 2005, an estate of a decedent with a surviving spouse may elect an estate deduction for assets that are eligible to be treated as qualified terminable interest property ("QTIP") under Code §2056(b)(7).The maximum allowable Maine QTIP deduction is the difference between the decedent's federal exclusion amount or, if no federal return is required, the pro forma federal exclusion amount and the Maine exclusion amount. The Maine QTIP may not include property designated as federal QTIP property, nor may it include property included in adjusted taxable gifts. Maine QTIP property is tax-deferred for Maine estate tax purposes until the death of the surviving spouse. At the death of the surviving spouse, the remaining Maine QTIP property is revalued and is identified as Maine elective property which must be included in the surviving spouse's taxable estate. For estates of decedents dying on or after January 1, 2010 but before January 1, 2011, the total allowable Maine QTIP under Maine law is $2.5 million. This represents the difference between the Maine estate tax exclusion amount of $1,000,000 and the federal estate tax exclusion amount of $3.5 million as of 2009. For estates of decedents dying on or after January 1, 2011, the total allowable Maine QTIP under Maine law is calculated based on the federal exclusion amount as of the decedent's actual date of death.

B.Maine elective property.If a decedent was predeceased by a spouse whose estate elected a deduction for a Maine QTIP, the remaining property in the Maine QTIP must be included in the value of the estate of the surviving spouse as Maine elective property. The value of the Maine elective property is measured at the death of the surviving spouse and is added to the federal tentative taxable estate of the surviving spouse to calculate the Maine taxable estate. If the estate of the surviving spouse is based on the alternate valuation date, then the same alternate valuation date is to be used for valuation of the Maine elective property.