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| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5297 Introduced , by Rep. Sidney H. Mathias SYNOPSIS AS INTRODUCED:
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35 ILCS 405/2 | from Ch. 120, par. 405A-2 |
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Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, in the case of a surviving spouse of a decedent who died on or after January 1, 2012, the exclusion amount shall also include the unused exclusion amount of the predeceased spouse. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| | HB5297 | | LRB097 18662 HLH 63896 b |
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1 | | AN ACT concerning revenue.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 5. The Illinois Estate and Generation-Skipping |
5 | | Transfer Tax Act is amended by changing Section 2 as follows:
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6 | | (35 ILCS 405/2) (from Ch. 120, par. 405A-2)
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7 | | (Text of Section before amendment by P.A. 97-636 ) |
8 | | Sec. 2. Definitions.
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9 | | "Federal estate tax" means the tax due to the United States |
10 | | with respect
to a taxable transfer under Chapter 11 of the |
11 | | Internal Revenue Code.
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12 | | "Federal generation-skipping transfer tax" means the tax |
13 | | due to the
United States with respect to a taxable transfer |
14 | | under Chapter 13 of the
Internal Revenue Code.
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15 | | "Federal return" means the federal estate tax return with |
16 | | respect to the
federal estate tax and means the federal |
17 | | generation-skipping transfer tax
return
with respect to the |
18 | | federal generation-skipping transfer tax.
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19 | | "Federal transfer tax" means the federal estate tax or the |
20 | | federal
generation-skipping transfer tax.
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21 | | "Illinois estate tax" means the tax due to this State with |
22 | | respect to a
taxable transfer.
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23 | | "Illinois generation-skipping transfer tax" means the tax |
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| | HB5297 | - 2 - | LRB097 18662 HLH 63896 b |
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1 | | due to this State
with respect to a taxable transfer that gives |
2 | | rise to a federal
generation-skipping transfer tax.
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3 | | "Illinois transfer tax" means the Illinois estate tax or |
4 | | the Illinois
generation-skipping transfer tax.
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5 | | "Internal Revenue Code" means, unless otherwise provided, |
6 | | the Internal
Revenue Code of 1986, as
amended from time to |
7 | | time.
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8 | | "Non-resident trust" means a trust that is not a resident |
9 | | of this State
for purposes of the Illinois Income Tax Act, as |
10 | | amended from time to time.
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11 | | "Person" means and includes any individual, trust, estate, |
12 | | partnership,
association, company or corporation.
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13 | | "Qualified heir" means a qualified heir as defined in |
14 | | Section 2032A(e)(1)
of the Internal Revenue Code.
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15 | | "Resident trust" means a trust that is a resident of this |
16 | | State for
purposes of the Illinois Income Tax Act, as amended |
17 | | from time to time.
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18 | | "State" means any state, territory or possession of the |
19 | | United States and
the District of Columbia.
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20 | | "State tax credit" means:
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21 | | (a) For persons dying on or after January 1, 2003 and
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22 | | through December 31, 2005, an amount
equal
to the full credit |
23 | | calculable under Section 2011 or Section 2604 of the
Internal |
24 | | Revenue
Code as the credit would have been computed and allowed |
25 | | under the Internal
Revenue
Code as in effect on December 31, |
26 | | 2001, without the reduction in the State
Death Tax
Credit as |
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1 | | provided in Section 2011(b)(2) or the termination of the State |
2 | | Death
Tax Credit
as provided in Section 2011(f) as enacted by |
3 | | the Economic Growth and Tax Relief
Reconciliation Act of 2001, |
4 | | but recognizing the increased applicable exclusion
amount
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5 | | through December 31, 2005.
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6 | | (b) For persons dying after December 31, 2005 and on or |
7 | | before December 31,
2009, and for persons dying after December |
8 | | 31, 2010, an amount equal to the full
credit
calculable under |
9 | | Section 2011 or 2604 of the Internal Revenue Code as the
credit |
10 | | would
have been computed and allowed under the Internal Revenue |
11 | | Code as in effect on
December 31, 2001, without the reduction |
12 | | in the State Death Tax Credit as
provided in
Section 2011(b)(2) |
13 | | or the termination of the State Death Tax Credit as provided
in
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14 | | Section 2011(f) as enacted by the Economic Growth and Tax |
15 | | Relief Reconciliation
Act of
2001, but recognizing the |
16 | | exclusion amount of only $2,000,000, and with reduction to the |
17 | | adjusted taxable estate for any qualified terminable interest |
18 | | property election as defined in subsection (b-1) of this |
19 | | Section. In the case of a surviving spouse of a decedent who |
20 | | died on or after January 1, 2012, the exclusion amount shall |
21 | | also include the unused exclusion amount of the predeceased |
22 | | spouse.
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23 | | (b-1) The person required to file the Illinois return may |
24 | | elect on a timely filed Illinois return a marital deduction for |
25 | | qualified terminable interest property under Section |
26 | | 2056(b)(7) of the Internal Revenue Code for purposes of the |
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| | HB5297 | - 4 - | LRB097 18662 HLH 63896 b |
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1 | | Illinois estate tax that is separate and independent of any |
2 | | qualified terminable interest property election for federal |
3 | | estate tax purposes. For purposes of the Illinois estate tax, |
4 | | the inclusion of property in the gross estate of a surviving |
5 | | spouse is the same as under Section 2044 of the Internal |
6 | | Revenue Code. |
7 | | In the case of any trust for which a State or federal |
8 | | qualified terminable interest property election is made, the |
9 | | trustee may not retain non-income producing assets for more |
10 | | than a reasonable amount of time without the consent of the |
11 | | surviving spouse.
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12 | | "Taxable transfer" means an event that gives rise to a |
13 | | state tax credit,
including any credit as a result of the |
14 | | imposition of an
additional tax under Section 2032A(c) of the |
15 | | Internal Revenue Code.
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16 | | "Transferee" means a transferee within the meaning of |
17 | | Section 2603(a)(1)
and Section 6901(h) of the Internal Revenue |
18 | | Code.
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19 | | "Transferred property" means:
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20 | | (1) With respect to a taxable transfer occurring at the |
21 | | death of an
individual, the
deceased individual's gross |
22 | | estate as defined in Section 2031 of the
Internal Revenue |
23 | | Code.
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24 | | (2) With respect to a taxable transfer occurring as a |
25 | | result of a
taxable termination as defined in Section |
26 | | 2612(a) of the Internal Revenue Code,
the taxable amount |
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| | HB5297 | - 5 - | LRB097 18662 HLH 63896 b |
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1 | | determined under Section 2622(a) of the Internal Revenue
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2 | | Code.
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3 | | (3) With respect to a taxable transfer occurring as a |
4 | | result of a
taxable distribution as defined in Section |
5 | | 2612(b) of the Internal Revenue Code,
the taxable amount |
6 | | determined under Section 2621(a) of the Internal Revenue
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7 | | Code.
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8 | | (4) With respect to an event which causes the |
9 | | imposition of an
additional estate tax under Section |
10 | | 2032A(c) of the Internal Revenue Code,
the
qualified real |
11 | | property that was disposed of or which ceased to be used |
12 | | for
the qualified use, within the meaning of Section |
13 | | 2032A(c)(1) of the Internal
Revenue Code.
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14 | | "Trust" includes a trust as defined in Section 2652(b)(1) |
15 | | of the Internal
Revenue Code.
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16 | | (Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11.)
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17 | | (Text of Section after amendment by P.A. 97-636 ) |
18 | | Sec. 2. Definitions.
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19 | | "Federal estate tax" means the tax due to the United States |
20 | | with respect
to a taxable transfer under Chapter 11 of the |
21 | | Internal Revenue Code.
|
22 | | "Federal generation-skipping transfer tax" means the tax |
23 | | due to the
United States with respect to a taxable transfer |
24 | | under Chapter 13 of the
Internal Revenue Code.
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25 | | "Federal return" means the federal estate tax return with |
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| | HB5297 | - 6 - | LRB097 18662 HLH 63896 b |
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1 | | respect to the
federal estate tax and means the federal |
2 | | generation-skipping transfer tax
return
with respect to the |
3 | | federal generation-skipping transfer tax.
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4 | | "Federal transfer tax" means the federal estate tax or the |
5 | | federal
generation-skipping transfer tax.
|
6 | | "Illinois estate tax" means the tax due to this State with |
7 | | respect to a
taxable transfer.
|
8 | | "Illinois generation-skipping transfer tax" means the tax |
9 | | due to this State
with respect to a taxable transfer that gives |
10 | | rise to a federal
generation-skipping transfer tax.
|
11 | | "Illinois transfer tax" means the Illinois estate tax or |
12 | | the Illinois
generation-skipping transfer tax.
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13 | | "Internal Revenue Code" means, unless otherwise provided, |
14 | | the Internal
Revenue Code of 1986, as
amended from time to |
15 | | time.
|
16 | | "Non-resident trust" means a trust that is not a resident |
17 | | of this State
for purposes of the Illinois Income Tax Act, as |
18 | | amended from time to time.
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19 | | "Person" means and includes any individual, trust, estate, |
20 | | partnership,
association, company or corporation.
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21 | | "Qualified heir" means a qualified heir as defined in |
22 | | Section 2032A(e)(1)
of the Internal Revenue Code.
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23 | | "Resident trust" means a trust that is a resident of this |
24 | | State for
purposes of the Illinois Income Tax Act, as amended |
25 | | from time to time.
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26 | | "State" means any state, territory or possession of the |
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| | HB5297 | - 7 - | LRB097 18662 HLH 63896 b |
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1 | | United States and
the District of Columbia.
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2 | | "State tax credit" means:
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3 | | (a) For persons dying on or after January 1, 2003 and
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4 | | through December 31, 2005, an amount
equal
to the full credit |
5 | | calculable under Section 2011 or Section 2604 of the
Internal |
6 | | Revenue
Code as the credit would have been computed and allowed |
7 | | under the Internal
Revenue
Code as in effect on December 31, |
8 | | 2001, without the reduction in the State
Death Tax
Credit as |
9 | | provided in Section 2011(b)(2) or the termination of the State |
10 | | Death
Tax Credit
as provided in Section 2011(f) as enacted by |
11 | | the Economic Growth and Tax Relief
Reconciliation Act of 2001, |
12 | | but recognizing the increased applicable exclusion
amount
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13 | | through December 31, 2005.
|
14 | | (b) For persons dying after December 31, 2005 and on or |
15 | | before December 31,
2009, and for persons dying after December |
16 | | 31, 2010, an amount equal to the full
credit
calculable under |
17 | | Section 2011 or 2604 of the Internal Revenue Code as the
credit |
18 | | would
have been computed and allowed under the Internal Revenue |
19 | | Code as in effect on
December 31, 2001, without the reduction |
20 | | in the State Death Tax Credit as
provided in
Section 2011(b)(2) |
21 | | or the termination of the State Death Tax Credit as provided
in
|
22 | | Section 2011(f) as enacted by the Economic Growth and Tax |
23 | | Relief Reconciliation
Act of
2001, but recognizing the |
24 | | exclusion amount of only (i) $2,000,000 for persons dying prior |
25 | | to January 1, 2012, (ii) $3,500,000 for persons dying on or |
26 | | after January 1, 2012 and prior to January 1, 2013, and (iii) |
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1 | | $4,000,000 for persons dying on or after January 1, 2013, and |
2 | | with reduction to the adjusted taxable estate for any qualified |
3 | | terminable interest property election as defined in subsection |
4 | | (b-1) of this Section. In the case of a surviving spouse of a |
5 | | decedent who died on or after January 1, 2012, the exclusion |
6 | | amount shall also include the unused exclusion amount of the |
7 | | predeceased spouse.
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8 | | (b-1) The person required to file the Illinois return may |
9 | | elect on a timely filed Illinois return a marital deduction for |
10 | | qualified terminable interest property under Section |
11 | | 2056(b)(7) of the Internal Revenue Code for purposes of the |
12 | | Illinois estate tax that is separate and independent of any |
13 | | qualified terminable interest property election for federal |
14 | | estate tax purposes. For purposes of the Illinois estate tax, |
15 | | the inclusion of property in the gross estate of a surviving |
16 | | spouse is the same as under Section 2044 of the Internal |
17 | | Revenue Code. |
18 | | In the case of any trust for which a State or federal |
19 | | qualified terminable interest property election is made, the |
20 | | trustee may not retain non-income producing assets for more |
21 | | than a reasonable amount of time without the consent of the |
22 | | surviving spouse.
|
23 | | "Taxable transfer" means an event that gives rise to a |
24 | | state tax credit,
including any credit as a result of the |
25 | | imposition of an
additional tax under Section 2032A(c) of the |
26 | | Internal Revenue Code.
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| | HB5297 | - 9 - | LRB097 18662 HLH 63896 b |
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1 | | "Transferee" means a transferee within the meaning of |
2 | | Section 2603(a)(1)
and Section 6901(h) of the Internal Revenue |
3 | | Code.
|
4 | | "Transferred property" means:
|
5 | | (1) With respect to a taxable transfer occurring at the |
6 | | death of an
individual, the
deceased individual's gross |
7 | | estate as defined in Section 2031 of the
Internal Revenue |
8 | | Code.
|
9 | | (2) With respect to a taxable transfer occurring as a |
10 | | result of a
taxable termination as defined in Section |
11 | | 2612(a) of the Internal Revenue Code,
the taxable amount |
12 | | determined under Section 2622(a) of the Internal Revenue
|
13 | | Code.
|
14 | | (3) With respect to a taxable transfer occurring as a |
15 | | result of a
taxable distribution as defined in Section |
16 | | 2612(b) of the Internal Revenue Code,
the taxable amount |
17 | | determined under Section 2621(a) of the Internal Revenue
|
18 | | Code.
|
19 | | (4) With respect to an event which causes the |
20 | | imposition of an
additional estate tax under Section |
21 | | 2032A(c) of the Internal Revenue Code,
the
qualified real |
22 | | property that was disposed of or which ceased to be used |
23 | | for
the qualified use, within the meaning of Section |
24 | | 2032A(c)(1) of the Internal
Revenue Code.
|
25 | | "Trust" includes a trust as defined in Section 2652(b)(1) |
26 | | of the Internal
Revenue Code.
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| | HB5297 | - 10 - | LRB097 18662 HLH 63896 b |
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1 | | (Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11; |
2 | | 97-636, eff. 6-1-12.)
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3 | | Section 95. No acceleration or delay. Where this Act makes |
4 | | changes in a statute that is represented in this Act by text |
5 | | that is not yet or no longer in effect (for example, a Section |
6 | | represented by multiple versions), the use of that text does |
7 | | not accelerate or delay the taking effect of (i) the changes |
8 | | made by this Act or (ii) provisions derived from any other |
9 | | Public Act.
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10 | | Section 99. Effective date. This Act takes effect upon |
11 | | becoming law.
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