Fillable Form 706me - Maine Estate Tax Return

INSTRUCTIONS FOR MAINE ESTATE TAX RETURN (36 M.R.S. §§ 4101 - 4118)

For FAQs and other estate tax information, see

GENERAL INFORMATION

2014 actual or pro forma federal Form 706. If Form 706ME

is not required to be ﬁ led (see General Information above)

The Maine estate tax applies to the estate of every decedent who,

a Statement of Value (700-SOV) may be used to request

at the time of death, was a resident of Maine and to the estate of

a discharge of the automatic property lien provided under

every nonresident decedent whose adjusted federal gross estate*

36 M.R.S. § 4112.

consists of real and tangible personal property located in Maine

on the date of death or, in the case of a gift made within one year

Line 2: Maine qualiﬁ ed terminable interest property (“QTIP”).

of death, at the time of the gift. A Maine estate tax return must be

Maine allows a deduction for assets that are eligible for the

ﬁ led if a federal estate tax return is required to be ﬁ led, the estate is

QTIP election under IRC section 2056(b)(7), when a QTIP

making a Maine QTIP election, or the adjusted federal gross estate*

election is not made on that property for federal estate tax

exceeds $2 million. The Maine estate tax return is due nine months

purposes. Entering an amount on this line constitutes a

after the date of death.

Maine QTIP election for eligible property. The maximum

allowable Maine QTIP election is the difference between the

*Adjusted federal gross estate means the sum of federal Form

decedent’s federal exclusion amount, net of any deceased

706, line 1, the value of Maine elective property and the value of

spousal unused exclusion from a predeceased spouse, and

adjusted taxable gifts made within one year of death.

the Maine exclusion amount. For 2014 decedents, this

For more information see 36 M.R.S., chapter 577, the guidance

maximum election is $3,340,000 ($5,340,000 - $2,000,000).

document Maine Estate Tax for Deaths Occurring after 2012 and

If the Maine QTIP is a portion of a trust or other property

MRS Rule

603,

available at

included in the federal taxable estate, the personal

estate.

representative is considered to have made an election

equal to a fraction of that trust or property. The numerator

Certiﬁ cates of Discharge of Estate Tax Lien for real property

of the fraction is the amount of the Maine QTIP entered on

and for tangible personal property may be submitted by email to

this line and the denominator is the total value of the trust

Maine Revenue Services (“MRS”) at: estatetax@maine.gov. The

or other property. Attach a description of the assets in

certiﬁ cates may be formatted as either a pdf document or a Microsoft

the Maine QTIP. A Maine QTIP cannot contain items that

Word ﬁ le. An emailed certiﬁ cate is acceptable only if sent from one

are includible as taxable gifts on the federal return. The

of the email addresses included on page one of the return (personal

Maine QTIP election defers taxation of the transfer of that

representative or estate representative). An emailed certiﬁ cate must

property to the death of the decedent’s spouse (subsequent

also contain all of the information included on the ofﬁ cial form. While

decedent spouse). The Maine estate tax return for the

a certiﬁ cate may be submitted by mail or email, Form 706ME must

subsequent decedent spouse must include the remaining

be sent by mail.

value of the Maine QTIP, which is referred to as Maine

elective property. See MRS Rule 603.

SPECIFIC FORM INSTRUCTIONS

Line 3: Maine elective property.

If the decedent had a

Step 1 Decedent and Personal Representative Information:

predeceased spouse who made a Maine QTIP election,

The personal representative, or executor, is the individual

this line must include the current value of the Maine QTIP,

legally responsible for administration of the estate. If a

regardless of the location or type of property (tangible or

personal representative has not been appointed, every

intangible). This amount is called Maine elective property.

person in possession of property of the decedent is

All holdings that constitute Maine elective property,

considered a personal representative and must ﬁ le a return

including cash, securities, real estate and tangible personal

or be listed on the single return that is ﬁ led for the estate.

property, must be included on this line. The property must

If the estate has more than one personal representative

be valued on the date of death of the decedent, unless the

and a single return is ﬁ led, ﬁ ll in the information for one

alternate valuation date under the Internal Revenue Code

personal representative and attach a schedule listing all

(“IRC”) § 2032 is used for all assets.

other personal representatives. A personal representative,

Line 4: Value of gifts included in federal Form 706, Part 2,

including a nonresident, may have to ﬁ le a Maine income tax

line 4 made within one year of death.

Enter the value of

return for any estate fees or other income earned in Maine.

taxable gifts completed within the 365-day period ending

For more information, see Maine Rule 806 (Nonresident

on the decedent’s date of death, regardless of the location

Individual Income Tax) and the instructions for Form

or type of property (tangible or intangible).

1040ME, Schedule NR at

Line 6a. Real and tangible personal property located in Maine.

Step 2

Authorized Representative Information: Complete

This line must be completed for both the estate of a Maine

this step if you choose to have copies of conﬁ dential

resident decedent and the estate of a nonresident decedent.

tax information sent to anyone other than the personal

Enter the amount of real and tangible personal property

representative, such as the preparer of Form 706ME. If

included in line 6 less the value of real and tangible personal

a paid preparer completed the return, that preparer must

property located outside of Maine on the date of death of

also sign the return on page 3. The person in this section

the decedent or, in the case of a gift, on the date of the gift.

is referred to as the estate representative.

The estate of a nonresident decedent must include on this

Step 3 Decedent’s Maine Residency Status: Check the

line real and tangible personal property located in Maine

appropriate box for the decedent’s residency status. For

held in a trust, LLC or other pass-through entity, unless

additional information concerning residency status, see

that property is acquired through a bona ﬁ de sale for full

guidance and

and adequate consideration, the ownership of the property

select “Guidance to Residency Status.”

in the entity is for a valid business purpose and the entity

Step 4 Tax Computation: Complete this section based on the

actively carries on a business for the purpose of proﬁ t and

Form 706me - Maine Estate Tax Return - 2014 Page 4

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