2005 MAINE ESTATE TAX RETURN
(36 M.R.S.A. §§ 4061, et seq.)
Maine decouples from federal tax. There is no federal state death tax credit for estates of decedents dying after 2004. A pro forma
federal state death tax credit amount will be used for purposes of calculating the Maine estate tax. The Worksheet for Line 5 (Maine
gross estate tax) is provided on page 4. For 2005 decedents, Maine is using an applicable credit of $326,300.
Filing requirement. A Maine estate tax return is required to be filed for a 2005 decedent when a federal estate tax return is required
to be filed or when the federal gross estate plus adjusted taxable gifts exceeds the Maine-defined exclusion amount (See PL 2005,
c. 218, § 43). The Maine exclusion amount for deaths occurring in 2005 is $950,000.
Maine Qualified Terminable Interest Property (“QTIP”). Beginning with 2005 decedents, an estate may elect to include some or all
of the difference between the decedent’s federal exclusion amount under IRC§ 2010(c) and the Maine exclusion amount as separate
QTIP property for Maine estate tax purposes, thereby decreasing the taxable estate of the first decedent spouse. This election is
made by entering the amount of eligible Maine QTIP property on Form 706ME, Line 4B. Upon the death of the surviving spouse,
the value of that estate is, for Maine estate tax purposes, increased by the value of the Maine QTIP property (Maine Elective
Property) determined at the time of death of the surviving spouse. The amount of eligible Maine QTIP property may not exceed the
difference between the federal exclusion amount and the Maine exclusion amount in effect for the year of death (See PL 2005, c. 12,
Pt. N, §§1-4).
Property transferred to a pass-through entity. For estates of nonresident decedent’s dying on or after January 1, 2005, real and
tangible personal property located in Maine and held in a trust, limited liability company or other pass-through entity is treated
as though the entity or instrument did not exist. The decedent’s interest is taxed in Maine to the extent that such property is
included in the decedent’s federal gross estate (See PL 2005, c. 12, Pt. M, §§1 & 2).
Alternate valuation date. Maine Revenue Services will allow the personal representative of a taxable Maine estate to elect the
alternate valuation date for determining the value of the estate’s property. The alternate valuation date is allowed only if it is
used for federal estate tax purposes. If there is no federal tax liability, an alternate valuation date may be allowed if federal
requirements are met.
Enter all required information. Failure to fully complete this section
Enter the amount of the taxable estate for federal or pro forma
will delay the processing of the return. If a personal representative
purposes, federal Form 706, Part 2, Line 3a.
has not been appointed, qualified and acting in the United States,
Beginning with deaths occurring in 2005, for decedents with
every person in actual or constructive possession of any property
surviving spouses, Maine allows a separate estate tax
of the decedent is considered a personal representative and
deduction for assets that are Qualified Terminable Interest
must file a return. A personal representative can also be known
Property (QTIP) under IRC Section 2056(b)(7), regardless of
as an executor or any other individual legally responsible for
whether a QTIP election is made for federal estate tax
administration of the estate. If there is more than one personal
purposes. The completion of Line 4B with an amount greater
representative, fill in the information for one personal
than zero will constitute a QTIP election for eligible Maine QTIP
representative and attach a schedule listing them all.
property by the executor or personal representative. The
This section must be completed if you choose to have copies of
maximum allowable QTIP deduction on Line 4B is the difference
confidential tax information sent to anyone other than the personal
between the decedent’s federal exclusion amount (or, if no
representative, such as the preparer of Form 706ME. If you are
federal return is required, the pro forma federal taxable estate)
a paid preparer, you must also sign the return.
and the Maine exclusion amount, but in no event may the Maine
Check the appropriate box for the estate’s residency status.
QTIP deduction exceed $550,000 for 2005. If the deduction on
Tax Computation. If the total gross estate plus adjusted
Line 4B is a portion of a trust included in the federal gross
prior taxable gifts is $950,000 or less, skip to Step 5.
estate, the executor or personal representative shall be
considered to have made an election only as to a fraction of
Maine’s portion of total gross estate.
the trust (or other property). The numerator of this fraction is
For Maine resident estates: Subtract the value of real
equal to the amount of the trust (or other property) deducted
and tangible personal property not located in Maine from
on Line 4B, and the denominator is equal to the total value of
the total gross estate.
the trust (or other property) at the time of death of the deducting
For Maine nonresident estates: Include all real and
decedent (first to die). See
personal property located in Maine and personally owned
for more information. Attach a description of
by the decedent. This includes Maine real and personal
the QTIP property.
property held in trusts, LLCs or other pass-through vehicles
(see 36 M.R.S.A § 4064).
If the surviving spouse of a 2005 decedent also dies in 2005
and the first decedent’s estate claimed a Maine QTIP deduction
Enter the total gross estate from federal Form 706, Part 2,
on line 4B, the surviving spouse’s estate must include the current
Line 1. If no federal estate tax return was required, but the
Maine QTIP property value (MAINE ELECTIVE PROPERTY) on
total gross estate, including adjusted prior taxable gifts
(federal Form 706, Part 2, Line 4) is greater than $950,000,
complete a pro forma federal Form 706.
To calculate the amount for this line, use the worksheet on
Divide Line 1 by Line 2 to determine the Maine percentage of
the estate. Calculate to six decimal places.
Even if you were not required to file a federal return, you may still be liable for Maine tax if the total gross estate plus
adjusted taxable gifts is greater than $950,000. If you were not required to file a federal return and the total gross estate
plus adjusted taxable gifts is $950,000 or less, there is no Maine estate tax liability.
2005 Form 706ME, Page 3