Instructions For Form Ct-709 - Connecticut Estate And Gift Tax Return

Line 6

Some examples of terminable interests are:

•

A life estate;

Enter the total annual exclusions you are claiming for the

gifts listed on Schedule A (including gifts listed on

•

An estate for a specified number of years; or

Line 4). The first $10,000 or less of gifts to any donee

•

Any other property interest that after a period

during the calendar year of a present interest in property

of time may terminate or fail.

is excluded. However, if the first $10,000 of gifts to any

Life Estate with Power of Appointment

donee involved tangible personal property or real property

You may deduct, without an election, a gift of a terminable

located outside Connecticut, no exclusion would be

interest if all five of the following requirements are met:

available for Connecticut gift tax purposes with respect

to additional gifts to that donee.

1. The donee spouse must be entitled for life to all

of the income from the entire interest, or to a

If you split a gift with your spouse, the annual exclusion

specific portion of all the income from the entire

you claim against the gift may not be more than your half

interest;

of the gift. (The annual exclusion amount will be indexed

2. The income payable to the donee spouse must

for inflation after 1998 for federal and Connecticut gift

be payable annually or at more frequent

tax purposes. However, there is no adjustment to the

intervals;

annual exclusion amount for 1999.)

3. The donee spouse must have the power to

appoint the entire interest or the specific portion

Example: You give your sister a new car costing

$16,000. Your spouse agrees to gift split with you.

either to himself or herself or to his or her estate;

Each spouse will be considered to have made a gift of

4. The power in the donee spouse must be

$8,000 ($16,000 X .50). While the maximum annual

exercisable by him or her alone and (whether

exclusion per donee is $10,000, in this case each spouse

exercisable by will or during life) must be

will be allowed an exclusion of $8,000 and not $10,000.

exercisable in all events; and

5. The entire interest or the specific portion must

Line 7

not be subject to a power in any other person to

Subtract Line 6 from Line 5 and enter the balance on

appoint any part to any person other than the

Line 7. This is the total amount of gifts before the calculation

donee spouse.

of the marital deduction and charitable deduction.

Election to Deduct Qualified Terminable

Line 8

Interest Property (QTIP)

If you are claiming a marital deduction, indicate which

You may elect to deduct a gift of a terminable interest if

numbered items from Schedule A you are deducting in

the gift meets all of the following requirements:

the space provided on Line 8. Enter on Line 8 all of the

1. The donee spouse must be entitled for life to all

gifts to your spouse which you entered on Schedule A

of the income from the entire interest, or to a

and for which you are claiming a marital deduction. Do

specific portion of all the income from the entire

not enter any gift that you did not include on Schedule A.

interest;

2. The income payable to the donee spouse must

You may deduct all gifts of nonterminable interests made

be payable annually or at more frequent

during this time that you entered on Schedule A regardless

intervals; and

of amount, and certain gifts of terminable interests as

3. The entire interest or the specific portion must

outlined below.

not be subject to a power in any other person to

appoint any part to any person other than the

Do not enter on Line 8 any gifts to your spouse if your

donee spouse.

spouse was not a United States citizen at the time of the

gift.

Make the election by checking the box on Schedule A,

Line 14. You may not make the election on a late

Terminable Interests

filed Form CT-709.

Generally, you cannot take the marital deduction if the

Line 9

gift to your spouse is a terminable interest. In most cases,

a terminable interest is nondeductible if someone other

Enter the amount of the annual exclusions that were

than the donee spouse will have an interest in the property

claimed for the gifts that you entered on Line 8.

following the termination of the donee spouse’s interest.

Page 14

Instructions For Form Ct-709 - Connecticut Estate And Gift Tax Return - 1999 Page 14

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