Instructions For Form Rev-1500 - Pennsylvania Inheritance Tax Return Resident Decedent Page 21
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27on or after January 1, 1992 and before January 1, 1995. In order
of the first decedent spouse can be advantageous for tax purpos-
to claim the credit, complete this schedule, furnish required sup-
es if there are sufficient cash assets to pay the tax without impos-
porting information and make the election by filling in oval 10
ing a burden on the surviving spouse. Although there are numer-
on the REV-1500 cover sheet. If the oval is not filled in and
ous considerations, including estate tax consequences, it may be
Schedule N is not completed, the credit will not be allowed.
advantageous to make the election to tax in the first estate since
Contact the Inheritance Tax Division for additional information.
the value of the surviving spouse’s interest in the trust or similar
SCHEDULE O
arrangement is subject to tax at the spousal rate of zero percent.
ELECTION UNDER SECTION 9113 (a)
Schedules K and M can be used to determine the value of the
(SPOUSAL DISTRIBUTION)
surviving spouse’s interest.
Schedule O, which is only applicable to estates of decedents
dying on or after January 1, 1995, must be completed if the elec-
tion to tax the trust in the first decedent spouse’s estate is made.
It is not necessary to complete this schedule if all of the proper-
ty received by the surviving spouse is transferred outright to the
spouse without the incidents of a trust or other similar arrange-
ment, or if the estate representative has determined that it would
be more advantageous to allow the payment of the tax on the
qualified trust or similar arrangement to be postponed as provid-
ed under the law until the death of the second spouse (see
instructions for Schedule J).
The trust or similar arrangement for which an election to tax is
being made must be clearly identified. The name of the trust, or
the paragraph or item number of the instrument in which its
terms are set forth should be entered on Schedule O in the sec-
The election to tax a trust or similar arrangement for the sole use
tion below the decedent’s name and estate file number.
of the surviving spouse during the spouse’s lifetime, or portion
thereof, as a taxable transfer in the first decedent spouse’s estate
Values reported on this schedule must be consistent with
must be made by filling in oval 11 on the REV-1500 cover sheet
Schedules K and/or M.
and by completing Schedule O. Failure to fill in oval 11 and file
The value of all assets should be the fair market value on the date
Schedule O may result in the entire trust or similar arrangement
of the decedent’s death net of any deductions allocable against
being included as a taxable transfer in the estate of the surviving
the interests passing to the trust or similar arrangement.
spouse. A separate Schedule O must be filed for each qualified
trust or similar arrangement affected by an election to tax.
PART A: ALL INTERESTS PASSING TO THE
Schedule O can be used for nonresident decedent estates, as well
QUALIFIED TRUST OR SIMILAR ARRANGE-
as resident decedent estates.
MENT
Section 9113(a) of the Inheritance & Estate Tax Act of 1991, as
List all property interests that pass from the decedent to a trust
amended by Act 23 of 2000 provides for the inclusion of a trust
or similar arrangement for the sole use of the surviving spouse
or similar arrangement that benefits only the surviving spouse
during the spouse’s entire lifetime. Examples of these interests
during the spouse’s entire lifetime as a taxable transfer in the
include, but are not limited to:
estate of the surviving spouse and not as a taxable transfer in the
1. Assets passing under the decedent’s will.
transferor’s, or first decedent spouse’s, estate. The tax on a qual-
2. Assets passing by operation of law because of the designation
ified trust or life estate arrangement is not due until the death of
of a beneficiary, such as IRA’s, pensions, “in trust for”
the second spouse, at which time it becomes fully taxable in his
accounts, “payable on death” accounts, “transfer on death”
or her estate at the rate(s) applicable to the remainder benefici-
accounts, etc.
ary(ies) as of the surviving spouse’s date of death or the original
3. Assets held in trust.
testator’s date of death, whichever is less. There will be no
4. Annuity contracts.
deduction of the original value of the survivor’s expired life
estate.
If Schedule O includes a bequest of the residue or part of the
Section 9113(a) benefits the surviving spouse because the pay-
residue of the decedent’s estate, attach as an exhibit a computa-
ment of tax on the decedent’s assets is postponed until the death
tion showing how the value of the residue was determined.
of the surviving spouse. In situations where the surviving spouse
PART B: VALUE OF TRUST OR SIMILAR
must rely on the trust assets for maintenance income, the trust
ARRANGEMENT FOR WHICH A SECTION
assets are not depleted by the payment of tax, but instead are pre-
9113(A) ELECTION IS BEING MADE:
served in order to provide the maximum income, and principal
List in Part B the value of a trust or similar arrangement that
should an invasion of the principal, if the instrument so author-
izes, become necessary for the surviving spouse’s benefit.
passes to the surviving spouse for the spouse’s sole use during
Similarly, when the trust assets are comprised of real property
his or her entire lifetime for which a Section 9113(a) election is
and limited cash assets, the tax does not impose a burden which
made. The value as calculated on Schedules K and M, net of any
would necessitate the sale of the real property, which is often
deductions allocable to the surviving spouse’s interest, should be
the residence of the surviving spouse.
listed. Specific reference should be made to items listed in
Part A to allow cross reference of the items. If the election is
The estate can elect to include such a trust, or similar arrange-
ment, or portion thereof, as a taxable transfer in the transferor’s,
made for more than one trust, please specifically identify the
or first decedent spouse’s estate. The election to tax in the estate
individual trusts.
18
ADVERTISEMENT
0 votes
Related Articles
Related forms
Form Rev-1736 Ex - Instructions For Form Rev-1737-a Pennsylvania Inheritance Tax Return - Nonresident Decedent
Financial
Instructions For Form Rev-1737-a - Pennsylvania Inheritance Tax Return Nonresident Decedent
Financial
Instructions For Form It-40ez - Indiana Income Tax Return For Full-year Indiana Resident Filers With No Dependents - 2014
Financial
Related Categories
Parent category: Financial