Instructions For Form M706 - Estate Tax - Minnesota Department Of Revenue

Line Instructions

(continued)

Line 2b

Worksheet A – To Determine Line 7

Federal Taxable Gifts Made Within Three

Minnesota allows a Minnesota-only QTIP election for qualifying property. A trust using

Years of Death

a Minnesota-only QTIP election must satisfy all the requirements of section 2056(b)

Enter on this line only those Federal taxable

gifts reported on the Federal 706 Line 4 that

of the Internal Revenue Code, but the election need not have been made at the federal

were made within three years of death.

level. To claim a Minnesota-only QTIP election, complete Worksheet A and include

a value on Line 7 of the M706 form page 1. The Minnesota-only QTIP should not be

Line 3

claimed for property already deducted for the federal QTIP election. Attach a continu-

Deduction for Death Taxes Paid to a

ation schedule if more than one property is being included under the election. (M.S.

Foreign Country

291.03, subd. 1d)

Any deduction claimed on the Federal

schedules J-L for foreign death taxes paid

must be entered on this line.

Line 4

2017 Rate Table - Use to Determine line 10

Minnesota-only QTIP Property Previously

Allowed

If line 9 is:

Enter on line 10 of Form M706:

Enter on this line Minnesota-only QTIP

but

of the

property that had been deducted on a previ-

over

not over

amount over

ous spouse’s Minnesota estate tax return.

QTIP property must be included in the

5,100,000

12.0%

gross estate and taxed on the return of the

second spouse to die. Attach an itemized

5,100,000

7,100,000

612,000

12.8%

5,100,000

list of the Minnesota-only QTIP property

previously allowed. NOTE: Do not add

7,100,000

8,100,000

868,000

13.6%

7,100,000

amounts for property that is already

counted in federal gross estate. (M.S.

8,100,000

9,100,000

1,004,000

14.4%

8,100,000

291.03, subd. 1d)

9,100,000

10,100,000

1,148,000

15.2%

9,100,000

Any Minnesota-Only QTIP property having

situs in Minnesota should be included in the

10,100,000

—

1,300,000

16.0%

10,100,000

Step 1 Minnesota Gross Estate within the

M706 Worksheet B. The total value of the

Minnesota-Only QTIP property included

on the M706 Line 4 should be included in

the Step 4 Federal Gross Estate within the

M706 Worksheet B.

Worksheet B – To Determine Line 11

Line 6b

Step 1 – Minnesota Gross Estate

From the federal estate tax return, add the gross value of each item of the decedent’s

Qualified Small Business Property or

real and tangible personal property located in Minnesota. If the decedent is a resident of

Qualified Farm Property

From the M706Q, Part 7, line 4, enter the

Minnesota, include all intangible personal property.

amount the estate is electing to claim for

A nonresident decedent who owns an interest in a pass-through entity that has real or

the qualified small business property or

tangible personal property located or normally kept in Minnesota must include that real

qualified farm property deduction. Include

or tangible personal property on step 1 of Worksheet B. Pass-through entities include S

a copy of the completed M706Q with the

corporations, partnerships, limited liability companies, and trusts. A pass-through entity

filing of the M706 return.

excludes securities traded on an exchange regulated by the SEC.

Line 7

Step 2 – Gifts of Property with Minnesota Situs

From those federal taxable gifts included on Line 2b on page 1 of the M706, add the

Minnesota-Only QTIP Property

gross value of each real or tangible item of personal property located in Minnesota at

Complete Worksheet A on the form M706

page 3 and enter the amount for Line 3 of

the time the gift was executed. If the decedent was a resident of Minnesota at the time of

Worksheet A. Refer to the Worksheet A

the gift, include intangible personal property.

instructions for more details.

Step 7 – Ratio

When dividing step 3 by step 6, round the result to five decimal places and enter on step

Line 12

7. Multiply the ratio on step 7 by the amount on line 10 of page 1 of Minnesota Form

Nonresident Decedent Tax Credit

M706. Enter that result on line 11 of page 1 of Form M706.

The credit is for nonresident decedents who

reported in the gross estate real or tangible

personal property owned by the decedent

through a pass-through entity.

Continued

Instructions For Form M706 - Estate Tax - Minnesota Department Of Revenue - 2017 Page 5

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