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

gifts of tangible personal property or real property located

Example: During October 1998, Ted conveys title to

outside Connecticut, the donor is not entitled to the annual

his house to a friend while retaining life use for himself.

exclusion to that extent for Connecticut gift tax purposes.

Ted does not receive any money or other type of

payment from his friend. By retaining life use, Ted

For gifts made to a spouse who is not a United States

has made a gift of a remainder interest to his friend.

citizen, the annual exclusion is $101,000. (See Gifts to

The gift of a remainder interest is a gift of a future

Your Spouse on Page 9.)

interest. Ted is not allowed to claim the annual

No part of a gift of a future interest is covered by the

exclusion for his gift to his friend. If subsequently,

Ted were to transfer by gift his life use in the house,

annual exclusion. Future interests include reversions,

he would be making an additional gift.

remainders, and other interests or estates, whether vested

or contingent, and whether or not supported by a particular

For more information on valuation of these gifts, see Treasury

interest or estate, the use, possession or enjoyment of

Regulation §25.2512-5 (as amended by T.D. 8540).

which is to begin at some future date or time. However,

Special Valuation Rules

refer to I.R.C. §2503(c) for guidance on how to treat

gifts for the benefit of minors for Connecticut purposes.

Gifts, other than gifts of land classified as farmland in

accordance with Conn. Gen. Stat. §12-107c, must be

Deductions from the total amount of gifts are allowed

valued in accordance with the gift tax provisions of the

for gifts made to a:

Internal Revenue Code, and the regulations thereunder

•

Charitable organization;

including the special valuation rules of I.R.C. §§2701 to

•

Government entity (if the gift is exclusively for

2704 where they apply. Generally, the special valuation

public purposes); or

rules apply where a donor transfers certain property to a

•

Donee who at the time of the gift is the donor’s

member of his or her family and, immediately after the

spouse (provided such gifts are included in the

transfer, retains or is deemed to have retained an interest

total amount of gifts, for Connecticut gift tax

in the property. For example, certain gifts of real property

purposes).

in which the donor retains a life estate and transfers a

remainder interest to a member of his or her family are

subject to the special valuation rules. Where the special

Value of Gift

valuation rules apply, the value of the retained interest is

General Rules

disregarded in determining the value of the gift made to

the family member. For additional information, see

The value of a gift is the fair market value of the property

I.R.C. §2702.

on the date the gift is made. The fair market value is the

price at which the property would change hands between

a willing buyer and a willing seller, when neither is forced

Gifts of Farmland

to buy or sell, and when both have reasonable knowledge

of all relevant facts. Fair market value may not be

Transfers of Farmland or Change of

determined by a forced sale price, nor by the sale price

Classification

of the item in a market other than that in which the item

For transfers of land that is classified as farmland

is most commonly sold to the public. The location of the

according to Conn. Gen. Stat. §12-107c to a donee who

item must be taken into account whenever appropriate.

is a lineal descendant or spouse thereof, the property may

The valuation rules that are used in determining federal

be valued based upon its current use as farmland without

taxable gifts are also used in valuing Connecticut taxable

regard to neighborhood land use of a more intensive

gifts. For example, the fair market value of property

nature. If, within ten years of the transfer, such farmland

may be reduced by the unpaid principal balance of any

is transferred by the donee to a person other than the

mortgages to which the property is subject.

donee's lineal descendant or spouse thereof or is no longer

classified as farmland, such donee (or, if such land was

The value of any annuity, interest for life, term of

transferred to such donee's lineal descendant or spouse

years, remainder or reversionary interest (other than

thereof, such descendant or spouse thereof) shall be liable

those subject to the special valuation rules) shall be

for the difference between the tax that was due from the

determined in accordance with the tables found in IRS

donor and the tax that would have been due if such land

Publications 1457 and 1458.

had been valued based upon its fair market value, rather

than at its value as land classified as farmland.

Page 8

Instructions For Form Ct-709 - Connecticut Estate And Gift Tax Return - 1999 Page 8

Related Articles

Related forms

Related Categories