97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5297

 

Introduced 2/8/2012, by Rep. Sidney H. Mathias

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 405/2  from Ch. 120, par. 405A-2

    Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, in the case of a surviving spouse of a decedent who died on or after January 1, 2012, the exclusion amount shall also include the unused exclusion amount of the predeceased spouse. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5297LRB097 18662 HLH 63896 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Estate and Generation-Skipping
5Transfer Tax Act is amended by changing Section 2 as follows:
 
6    (35 ILCS 405/2)  (from Ch. 120, par. 405A-2)
7    (Text of Section before amendment by P.A. 97-636)
8    Sec. 2. Definitions.
9    "Federal estate tax" means the tax due to the United States
10with respect to a taxable transfer under Chapter 11 of the
11Internal Revenue Code.
12    "Federal generation-skipping transfer tax" means the tax
13due to the United States with respect to a taxable transfer
14under Chapter 13 of the Internal Revenue Code.
15    "Federal return" means the federal estate tax return with
16respect to the federal estate tax and means the federal
17generation-skipping transfer tax return with respect to the
18federal generation-skipping transfer tax.
19    "Federal transfer tax" means the federal estate tax or the
20federal generation-skipping transfer tax.
21    "Illinois estate tax" means the tax due to this State with
22respect to a taxable transfer.
23    "Illinois generation-skipping transfer tax" means the tax

 

 

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1due to this State with respect to a taxable transfer that gives
2rise to a federal generation-skipping transfer tax.
3    "Illinois transfer tax" means the Illinois estate tax or
4the Illinois generation-skipping transfer tax.
5    "Internal Revenue Code" means, unless otherwise provided,
6the Internal Revenue Code of 1986, as amended from time to
7time.
8    "Non-resident trust" means a trust that is not a resident
9of this State for purposes of the Illinois Income Tax Act, as
10amended from time to time.
11    "Person" means and includes any individual, trust, estate,
12partnership, association, company or corporation.
13    "Qualified heir" means a qualified heir as defined in
14Section 2032A(e)(1) of the Internal Revenue Code.
15    "Resident trust" means a trust that is a resident of this
16State for purposes of the Illinois Income Tax Act, as amended
17from time to time.
18    "State" means any state, territory or possession of the
19United States and the District of Columbia.
20    "State tax credit" means:
21    (a) For persons dying on or after January 1, 2003 and
22through December 31, 2005, an amount equal to the full credit
23calculable under Section 2011 or Section 2604 of the Internal
24Revenue Code as the credit would have been computed and allowed
25under the Internal Revenue Code as in effect on December 31,
262001, without the reduction in the State Death Tax Credit as

 

 

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1provided in Section 2011(b)(2) or the termination of the State
2Death Tax Credit as provided in Section 2011(f) as enacted by
3the Economic Growth and Tax Relief Reconciliation Act of 2001,
4but recognizing the increased applicable exclusion amount
5through December 31, 2005.
6    (b) For persons dying after December 31, 2005 and on or
7before December 31, 2009, and for persons dying after December
831, 2010, an amount equal to the full credit calculable under
9Section 2011 or 2604 of the Internal Revenue Code as the credit
10would have been computed and allowed under the Internal Revenue
11Code as in effect on December 31, 2001, without the reduction
12in the State Death Tax Credit as provided in Section 2011(b)(2)
13or the termination of the State Death Tax Credit as provided in
14Section 2011(f) as enacted by the Economic Growth and Tax
15Relief Reconciliation Act of 2001, but recognizing the
16exclusion amount of only $2,000,000, and with reduction to the
17adjusted taxable estate for any qualified terminable interest
18property election as defined in subsection (b-1) of this
19Section. In the case of a surviving spouse of a decedent who
20died on or after January 1, 2012, the exclusion amount shall
21also include the unused exclusion amount of the predeceased
22spouse.
23    (b-1) The person required to file the Illinois return may
24elect on a timely filed Illinois return a marital deduction for
25qualified terminable interest property under Section
262056(b)(7) of the Internal Revenue Code for purposes of the

 

 

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1Illinois estate tax that is separate and independent of any
2qualified terminable interest property election for federal
3estate tax purposes. For purposes of the Illinois estate tax,
4the inclusion of property in the gross estate of a surviving
5spouse is the same as under Section 2044 of the Internal
6Revenue Code.
7    In the case of any trust for which a State or federal
8qualified terminable interest property election is made, the
9trustee may not retain non-income producing assets for more
10than a reasonable amount of time without the consent of the
11surviving spouse.
12    "Taxable transfer" means an event that gives rise to a
13state tax credit, including any credit as a result of the
14imposition of an additional tax under Section 2032A(c) of the
15Internal Revenue Code.
16    "Transferee" means a transferee within the meaning of
17Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
18Code.
19    "Transferred property" means:
20        (1) With respect to a taxable transfer occurring at the
21    death of an individual, the deceased individual's gross
22    estate as defined in Section 2031 of the Internal Revenue
23    Code.
24        (2) With respect to a taxable transfer occurring as a
25    result of a taxable termination as defined in Section
26    2612(a) of the Internal Revenue Code, the taxable amount

 

 

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1    determined under Section 2622(a) of the Internal Revenue
2    Code.
3        (3) With respect to a taxable transfer occurring as a
4    result of a taxable distribution as defined in Section
5    2612(b) of the Internal Revenue Code, the taxable amount
6    determined under Section 2621(a) of the Internal Revenue
7    Code.
8        (4) With respect to an event which causes the
9    imposition of an additional estate tax under Section
10    2032A(c) of the Internal Revenue Code, the qualified real
11    property that was disposed of or which ceased to be used
12    for the qualified use, within the meaning of Section
13    2032A(c)(1) of the Internal Revenue Code.
14    "Trust" includes a trust as defined in Section 2652(b)(1)
15of the Internal Revenue Code.
16(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11.)
 
17    (Text of Section after amendment by P.A. 97-636)
18    Sec. 2. Definitions.
19    "Federal estate tax" means the tax due to the United States
20with respect to a taxable transfer under Chapter 11 of the
21Internal Revenue Code.
22    "Federal generation-skipping transfer tax" means the tax
23due to the United States with respect to a taxable transfer
24under Chapter 13 of the Internal Revenue Code.
25    "Federal return" means the federal estate tax return with

 

 

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1respect to the federal estate tax and means the federal
2generation-skipping transfer tax return with respect to the
3federal generation-skipping transfer tax.
4    "Federal transfer tax" means the federal estate tax or the
5federal generation-skipping transfer tax.
6    "Illinois estate tax" means the tax due to this State with
7respect to a taxable transfer.
8    "Illinois generation-skipping transfer tax" means the tax
9due to this State with respect to a taxable transfer that gives
10rise to a federal generation-skipping transfer tax.
11    "Illinois transfer tax" means the Illinois estate tax or
12the Illinois generation-skipping transfer tax.
13    "Internal Revenue Code" means, unless otherwise provided,
14the Internal Revenue Code of 1986, as amended from time to
15time.
16    "Non-resident trust" means a trust that is not a resident
17of this State for purposes of the Illinois Income Tax Act, as
18amended from time to time.
19    "Person" means and includes any individual, trust, estate,
20partnership, association, company or corporation.
21    "Qualified heir" means a qualified heir as defined in
22Section 2032A(e)(1) of the Internal Revenue Code.
23    "Resident trust" means a trust that is a resident of this
24State for purposes of the Illinois Income Tax Act, as amended
25from time to time.
26    "State" means any state, territory or possession of the

 

 

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1United States and the District of Columbia.
2    "State tax credit" means:
3    (a) For persons dying on or after January 1, 2003 and
4through December 31, 2005, an amount equal to the full credit
5calculable under Section 2011 or Section 2604 of the Internal
6Revenue Code as the credit would have been computed and allowed
7under the Internal Revenue Code as in effect on December 31,
82001, without the reduction in the State Death Tax Credit as
9provided in Section 2011(b)(2) or the termination of the State
10Death Tax Credit as provided in Section 2011(f) as enacted by
11the Economic Growth and Tax Relief Reconciliation Act of 2001,
12but recognizing the increased applicable exclusion amount
13through December 31, 2005.
14    (b) For persons dying after December 31, 2005 and on or
15before December 31, 2009, and for persons dying after December
1631, 2010, an amount equal to the full credit calculable under
17Section 2011 or 2604 of the Internal Revenue Code as the credit
18would have been computed and allowed under the Internal Revenue
19Code as in effect on December 31, 2001, without the reduction
20in the State Death Tax Credit as provided in Section 2011(b)(2)
21or the termination of the State Death Tax Credit as provided in
22Section 2011(f) as enacted by the Economic Growth and Tax
23Relief Reconciliation Act of 2001, but recognizing the
24exclusion amount of only (i) $2,000,000 for persons dying prior
25to January 1, 2012, (ii) $3,500,000 for persons dying on or
26after January 1, 2012 and prior to January 1, 2013, and (iii)

 

 

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1$4,000,000 for persons dying on or after January 1, 2013, and
2with reduction to the adjusted taxable estate for any qualified
3terminable interest property election as defined in subsection
4(b-1) of this Section. In the case of a surviving spouse of a
5decedent who died on or after January 1, 2012, the exclusion
6amount shall also include the unused exclusion amount of the
7predeceased spouse.
8    (b-1) The person required to file the Illinois return may
9elect on a timely filed Illinois return a marital deduction for
10qualified terminable interest property under Section
112056(b)(7) of the Internal Revenue Code for purposes of the
12Illinois estate tax that is separate and independent of any
13qualified terminable interest property election for federal
14estate tax purposes. For purposes of the Illinois estate tax,
15the inclusion of property in the gross estate of a surviving
16spouse is the same as under Section 2044 of the Internal
17Revenue Code.
18    In the case of any trust for which a State or federal
19qualified terminable interest property election is made, the
20trustee may not retain non-income producing assets for more
21than a reasonable amount of time without the consent of the
22surviving spouse.
23    "Taxable transfer" means an event that gives rise to a
24state tax credit, including any credit as a result of the
25imposition of an additional tax under Section 2032A(c) of the
26Internal Revenue Code.

 

 

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1    "Transferee" means a transferee within the meaning of
2Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
3Code.
4    "Transferred property" means:
5        (1) With respect to a taxable transfer occurring at the
6    death of an individual, the deceased individual's gross
7    estate as defined in Section 2031 of the Internal Revenue
8    Code.
9        (2) With respect to a taxable transfer occurring as a
10    result of a taxable termination as defined in Section
11    2612(a) of the Internal Revenue Code, the taxable amount
12    determined under Section 2622(a) of the Internal Revenue
13    Code.
14        (3) With respect to a taxable transfer occurring as a
15    result of a taxable distribution as defined in Section
16    2612(b) of the Internal Revenue Code, the taxable amount
17    determined under Section 2621(a) of the Internal Revenue
18    Code.
19        (4) With respect to an event which causes the
20    imposition of an additional estate tax under Section
21    2032A(c) of the Internal Revenue Code, the qualified real
22    property that was disposed of or which ceased to be used
23    for the qualified use, within the meaning of Section
24    2032A(c)(1) of the Internal Revenue Code.
25    "Trust" includes a trust as defined in Section 2652(b)(1)
26of the Internal Revenue Code.

 

 

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1(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11;
297-636, eff. 6-1-12.)
 
3    Section 95. No acceleration or delay. Where this Act makes
4changes in a statute that is represented in this Act by text
5that is not yet or no longer in effect (for example, a Section
6represented by multiple versions), the use of that text does
7not accelerate or delay the taking effect of (i) the changes
8made by this Act or (ii) provisions derived from any other
9Public Act.
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.