Form Et-417-D - Computation Of The Family-Owned Business Interests Deduction Page 2

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ET-417-D (2/00) (back)
Instructions
For up-to-the-minute information on New York State taxes,
for the mortgage interest deduction under section 163(h) of the
including your New York State estate tax return, visit our Web site
federal IRC, and are reported on Schedule K and included in the
at
amount on line 3.
Use this form to claim the family-owned business interests
Line 5 – Enter the amount of any indebtedness that is included in
deduction on the New York State estate tax return. Estates of
the amount on line 3, is not included in the amount on line 4, and
individuals who died on or after January 1, 1998, and before
whose proceeds were used to pay educational or medical
September 9, 1999, may elect this deduction or the family-owned
expenses of the decedent, his or her spouse, or dependents.
business exclusion. See Form ET-417 for information on the
Line 10 – Using the date of gift value, enter the amount of gifts, if
exclusion.
any, that:
To qualify:
are includable on line 4 of Part 2, page 1, of federal Form 706 (or
1.
The decedent must have been a citizen or resident of the
would be if a federal return was required);
United States on the date of death.
were gifts of qualified family-owned business interests, made by
2.
The qualified family-owned business must be an interest in a
the decedent during his or her lifetime, to any qualified heir,
trade or business, regardless of form, with its principal place of
except such gifts made to his or her spouse; and
business in the United States.
continuously held by such members of the decedents family from
3.
The adjusted value of the decedent’s qualified family-owned
the date of the gift to the date of the decedent’s death.
business interests that are passed to qualified heirs (line 13 of
Line 11 – Using the date of gift value, enter the total of gifts of
this form) must exceed 50% of the decedent’s federal adjusted
qualified family-owned business interests that are not included on
gross estate.
line 10 because they were excluded from federal taxable gifts due
4.
If a qualified heir is not a citizen of the United States, any
to the gift tax annual exclusion, and are not included in the federal
qualified family-owned business interests acquired by that heir
gross estate.
must be held in a trust meeting requirements similar to those
Line 14 – If the estate is not required to file a federal estate tax
imposed on Qualified Domestic Trusts (Q-DoTs) under
return, Form 706, the federal gross estate can be determined by
section 2056A(a) of the federal Internal Revenue Code (IRC).
taking the amount on page 2, line 32 of Form ET-90, New York
5.
The decedent and/or a member of his or her family must have
State Estate Tax Return, and reducing it by the amount on page 2,
owned the business interests at least five out of the eight years
line 33b.
immediately preceding the date of the decedent’s death, and
must have materially participated in the operation of the
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business during the same period.
6.
Qualified family-owned business interests include:
Telephone assistance is available from 8:30 a.m. to 4:25 p.m.
(eastern time), Monday through Friday. For estate tax information,
a. A sole proprietorship in a trade or business.
call toll free 1 800 641-0004. If busy, call 1 800 225-5829. To order
b. An interest in an entity, at least 50% of which is owned
forms and publications, call toll free 1 800 462-8100. From areas
(directly or indirectly) by the decedent and members of the
outside the U.S. and outside Canada, call (518) 485-6800.
decedent’s family.
Fax-on-demand forms ordering system: Most forms are
c. An interest in an entity, at least 70% of which is owned
available by fax 24 hours a day, 7 days a week. Call toll free from
(directly or indirectly) by members of two families and at
the U.S. and Canada 1 800 748-3676. You must use a Touch-Tone
least 30% of which is owned by the decedent and
phone to order by fax. A fax code is used to identify each form.
members of the decedent’s family.
d. An interest in an entity, at least 90% of which is owned
Internet access:
(directly or indirectly) by members of three families and at
Access our Web site for forms, publications, and information.
least 30% of which is owned by the decedent and
Hotline for the hearing and speech impaired: If you have access
members of the decedent’s family.
to a telecommunications device for the deaf (TDD), you can get
Qualified heirs include any individual who has been actively
answers to your New York State tax questions by calling toll free
employed by a trade or business for at least 10 years prior to the
from the U.S. and Canada 1 800 634-2110. Assistance is available
date of the decedent’s death, and members of the decedent’s
from 8:30 a.m. to 4:25 p.m. (eastern time), Monday through Friday.
family.
If you do not own a TDD, check with independent living centers or
community action programs to find out where machines are
Refer to the instructions for federal Form 706, Schedule T , for
available for public use.
additional information.
Persons with disabilities: In compliance with the Americans with
Caution: When an estate claims the family-owned business
Disabilities Act, we will ensure that our lobbies, offices, meeting
interests deduction on a New York State estate tax return, it may
rooms, and other facilities are accessible to persons with
not claim the agricultural credit or the credit for a closely-held
disabilities. If you have questions about special accommodations
business on its New York State estate tax return.
for persons with disabilities, please call the information numbers
Line instructions
listed above.
Line 4 – Include the balances outstanding as of the decedent’s
Mailing address: If you need to write, address your letter to: NYS
death, for mortgages and loans (acquisition and home equity
Tax Department, Taxpayer Assistance Bureau, W A Harriman
indebtedness) on a qualified residence of the decedent, that qualify
Campus, Albany NY 12227.

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