CT 706 709book
CT 706 709book
FORM
CT-706/709 Estate and Gift Tax
Return and Instructions
Page 2
Some Important Information
Repeal of Federal Estate Tax Has No Effect no election was made for federal estate tax purposes under
On Connecticut Estate Tax Liability IRC §2056(b)(7) to treat a trust or other property of the
decedent’s gross estate as QTIP property. A Connecticut
For Connecticut estate tax purposes, the Connecticut marital deduction is allowable for property passing from
taxable estate is the sum of two amounts, one of a donor or decedent to his or her spouse, whether in a
which is the gross estate less allowable deductions as civil union or in a marriage recognized under Public Act
determined under Chapter 11 of the Internal Revenue 2009-13, to the same extent that property transferred to
Code (IRC) (other than the deduction for state death a husband or wife or surviving spouse is allowable as a
taxes paid under §2058 of the IRC). The other amount marital deduction provided the requirements of IRC §2523
is the aggregate amount of all Connecticut taxable for gifts and §2056 for bequests are otherwise met.
gifts made by the decedent for all calendar years
beginning on or after January 1, 2005. Conn. Gen. Stat. Because neither civil unions nor marriages recognized
§12-391(c) provides that, “in the event of repeal of the under Public Act 2009-13 are recognized for federal tax
federal estate tax, then all references to the Internal purposes, civil union partners or spouses in a marriage
Revenue Code in this section shall mean the Internal recognized under Public Act 2009-13 who elect a marital
Revenue Code as in force on the day prior to the effective deduction for Connecticut gift tax or estate tax purposes
date of such repeal.” In Pub. L. No. 107-16, Congress are required to submit with the Form CT-706/709 filed
repealed the federal estate tax for estates of decedents with the Department of Revenue Services (DRS) or the
dying during 2010. Therefore, under Conn. Gen. Stat. Form CT-706 NT filed with the Probate Court:
§12-391(c), the IRC, for Connecticut estate tax purposes, • A pro forma federal Form 709 or Form 706 completed
is the IRC in force on December 31, 2009. While estates as if federal tax law allowed a marital deduction to civil
of decedents dying during 2010 may or may not be subject union partners or spouses in a marriage recognized under
to federal estate tax (depending on what action Congress Public Act 2009-13 which reflects the marital deductions
takes), estates of decedents dying during 2010 for which taken by them; and
the amount of the Connecticut taxable estate exceeds • A copy of the federal Form 709 or Form 706 (whichever
$3.5 million will be subject to Connecticut estate tax and is applicable) actually filed with the Internal Revenue
will be required, unless Congress acts to restore the federal Service (IRS).
estate tax for estates of decedents dying during 2010, Joint property: Civil union partners and spouses in a
to submit a pro forma federal Form 706, United States marriage recognized under Public Act 2009-13 are allowed
Estate (and Generation-Skipping Transfer) Tax Return to include in the gross estate of a decedent one-half the
(Rev. September 2009) along with Form CT-706/709. value of certain joint interests in the same manner that a
Civil Unions and Marriages Recognized husband and wife are permitted this treatment provided the
interest in property otherwise meets the requirements of
Under Public Act 2009-13 IRC §2040(b)(2).
Connecticut estate tax rules for individuals who were
Gift splitting: Spouses are eligible for federal gift tax
parties to a civil union or in a marriage recognized under
purposes to elect to gift split. Where spouses elect to gift
Public Act 2009-13 are the same Connecticut estate tax
split, all gifts made by one spouse to another person or
rules that apply to spouses in a marriage recognized for
persons are considered as made one-half by the donor
federal purposes.
and one-half by the donor’s spouse. This same election is
This treatment first applied for Connecticut gift tax purposes available for Connecticut gift tax purposes to civil union
to gifts made on or after January 1, 2006, for parties to partners and to spouses in a marriage recognized under
a civil union or a marriage recognized under Public Act Public Act 2009-13.
2009-13. The treatment first applied for Connecticut estate
Because neither civil unions nor marriages recognized
tax purposes to estates of decedents dying on or after
under Public Act 2009-13 are recognized for federal tax
January 1, 2006, for parties to a civil union or a marriage
purposes, civil union partners and spouses in a marriage
recognized under Public Act 2009-13. In these situations,
recognized under Public Act 2009-13 who elect to gift split
the following gift and estate tax provisions apply.
for Connecticut gift tax purposes are required to submit
Marital deduction: If any marital deduction is elected with the Form CT-706/709 filed with DRS:
for federal estate tax purposes, the same amount must also
• A pro forma federal Form 709, completed as if federal
be elected for Connecticut estate tax purposes. However,
law allowed them to gift split, which reflects the
an election may be made solely for Connecticut estate
gift-splitting elected by the spouses; and
tax purposes to have a trust or other property of the
decedent’s gross estate treated as QTIP property only if • Copies of the federal Forms 709 actually filed with the
IRS.
Page 3
DRS Policy on Cooperative Units • For a nonresident of Connecticut, the taxable gifts
include only real property or tangible personal property
The DRS treatment of cooperative units, for Connecticut
located in Connecticut.
estate and gift tax purposes follows the law of the
jurisdiction in which the property was located. For example, A Connecticut gift tax return must be filed to report all
if New York law treats shares in a New York cooperative as Connecticut taxable gifts made in any calendar year on or
intangible property, the treatment for Connecticut estate and after January 1, 2005, even though Connecticut gift tax
gift tax purposes of shares in a New York cooperative will may not be due.
be as intangible property. Likewise, because Connecticut Change in Connecticut gift tax exemption: For Connecticut
law treats a Connecticut cooperative unit as an interest in taxable gifts made during a calendar year beginning on or
real property the treatment for Connecticut estate and gift after January 1, 2010, a donor will not pay Connecticut gift
tax purposes of a Connecticut cooperative unit will be as tax unless the aggregate amount of the Connecticut taxable
an interest in real property. gifts made on or after January 1, 2005, exceeds $3.5
million. A credit is allowed against the Connecticut gift
Connecticut Gift Tax Overview tax for Connecticut gift taxes paid on Connecticut taxable
The Connecticut gift tax continues to apply to Connecticut gifts made during calendar years beginning on or after
taxable gifts, which are federal taxable gifts made by a January 1, 2005; however, the credit will not exceed the
resident or nonresident of Connecticut on or after January amount of the Connecticut gift tax.
1, 2005:
• For a Connecticut resident, the taxable gifts include
real property or tangible personal property located in
Connecticut as well as intangible personal property
wherever located; and
Gift Tax Table for Connecticut Taxable Gifts Made On or After January 1, 2010
If the Aggregate Amount
of Connecticut Taxable Gifts
Made On or After January 1, 2005 Is: The Amount of the Gift Tax Is:
Not over $3,500,000 None
Over $3,500,000 but not over $3,600,000 7.2% of the excess over $3,500,000
Over $3,600,000 but not over $4,100,000 $7,200 plus 7.8% of the excess over $3,600,000
Over $4,100,000 but not over $5,100,000 $46,200 plus 8.4% of the excess over $4,100,000
Over $5,100,000 but not over $6,100,000 $130,200 plus 9.0% of the excess over $5,100,000
Over $6,100,000 but not over $7,100,000 $220,200 plus 9.6% of the excess over $6,100,000
Over $7,100,000 but not over $8,100,000 $316,200 plus 10.2% of the excess over $7,100,000
Over $8,100,000 but not over $9,100,000 $418,200 plus 10.8% of the excess over $8,100,000
Over $9,100,000 but not over $10,100,000 $526,200 plus 11.4% of the excess over $9,100,000
Over $10,100,000 $640,200 plus 12% of the excess over $10,100,000
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Connecticut Estate Tax Overview DRS. A copy of Form CT-706/709 must also be filed with
Resident and nonresident estates are liable for the the appropriate probate court.
Connecticut estate tax if the amount of their Connecticut For a nonresident estate, if the amount of the Connecticut
taxable estate is more than $3.5 million. A resident estate taxable estate exceeds $3.5 million, the tax calculated is
is an estate of a decedent who at the time of death was then multiplied by a fraction. See line instructions for
domiciled in Connecticut. A nonresident estate is an estate Schedule E - Computation of Tax for Nonresident Decedent
of a decedent who at the time of death was not domiciled in Estate on Page 20.
Connecticut, but owned real or tangible personal property
If the amount of the Connecticut taxable estate is $3.5
in Connecticut.
million or less, Connecticut estate and gift tax is not
The Connecticut taxable estate is the sum of: due. However, the estate must file Form CT-706 NT,
• The total value of the decedent’s federal gross estate less Connecticut Estate Tax Return (for Nontaxable Estate),
allowable deductions (other than the deduction for state with the probate court for the district in which the
death taxes paid under IRC §2058); and decedent resided at the date of death, or if the decedent
• The aggregate amount of Connecticut taxable gifts made died as a nonresident of Connecticut, with the probate
by the decedent, during his or her lifetime, during all court for the district in which the decedent’s real
calendar years beginning on or after January 1, 2005. property or tangible personal property is located.
Do not file Form CT-706 NT with DRS.
If the amount of the Connecticut taxable estate exceeds
$3.5 million, the estate must file Form CT-706/709 with
Estate Tax Table for Estates of Decedents Dying On or After January 1, 2010
If the Amount of Connecticut
Taxable Estate Is: The Amount of the Estate Tax Is:
Not over $3,500,000 None
Over $3,500,000 but not over $3,600,000 7.2% of the excess over $3,500,000
Over $3,600,000 but not over $4,100,000 $7,200 plus 7.8% of the excess over $3,600,000
Over $4,100,000 but not over $5,100,000 $46,200 plus 8.4% of the excess over $4,100,000
Over $5,100,000 but not over $6,100,000 $130,200 plus 9.0% of the excess over $5,100,000
Over $6,100,000 but not over $7,100,000 $220,200 plus 9.6% of the excess over $6,100,000
Over $7,100,000 but not over $8,100,000 $316,200 plus 10.2% of the excess over $7,100,000
Over $8,100,000 but not over $9,100,000 $418,200 plus 10.8% of the excess over $8,100,000
Over $9,100,000 but not over $10,100,000 $526,200 plus 11.4% of the excess over $9,100,000
Over $10,100,000 $640,200 plus 12% of the excess over $10,100,000
Page 5
General Information
How to Get Help The following are the designated PDSs and designated
types of service at the time of publication:
DRS is ready to help you get answers to your Connecticut
tax questions. Visit the DRS website at www.ct.gov/DRS Federal Express (FedEx)
or call 1-800-382-9463 (Connecticut calls outside the • FedEx Priority Over night
Greater Hartford calling area only) or 860-297-5962 (from • FedEx Standard Over night
anywhere) during business hours, 8:30 a.m. to 4:30 p.m. For • FedEx 2 Day
• FedEx International Priority
walk-in assistance, visit the DRS office at 25 Sigourney Steet,
• FedEx International First
Hartford.
United Parcel Service (UPS)
How to Get Forms and Publications • UPS Next Day Air
Visit the DRS website at www.ct.gov/DRS to download • UPS Next Day Air Saver
and print Connecticut tax forms and publications anytime. • UPS 2nd Day Air
• UPS 2nd Day Air A.M.
Forms are also available during regular business hours at • UPS Worldwide Express Plus
the DRS office at 25 Sigourney Street, Hartford. • UPS Worldwide Express
The forms mentioned in these instructions are also available
This list is subject to change. See Policy Statement
from any of the Connecticut probate courts.
2008(3), Designated Private Delivery Services and
Recordkeeping Designated Types of Service.
Keep a copy of your tax return, worksheets you used, and Where to File
records of all items appearing on the return. You may need
Mail your return to:
this information to prepare future returns or to file amended
returns. Department of Revenue Services
PO Box 2978
Copies of Returns Hartford CT 06104-2978
To request copies of previously-filed Connecticut tax
returns from DRS, complete LGL-002, Request for Interest and Penalties
Disclosure of Tax Return or Tax Return Information. In general, interest and penalty apply to any portion of the
Requests are normally processed in three weeks. tax not paid on or before the original due date of the return.
Rounding Off to Whole Dollars Interest
You must round off cents to the nearest whole dollar on If you do not pay the tax when due, you will owe interest
your return and schedules. If you do not round, DRS will at the rate of 1% per month or fraction of a month until the
disregard the cents. Round down to the next lowest dollar tax is paid in full.
all amounts that include 1 through 49 cents. Round up to Interest on underpayment or late payment of tax cannot be
the next highest dollar all amounts that include 50 through waived.
99 cents. However, if you need to add two or more amounts
to compute the amount to enter on a line, include cents and Penalty for Late Payment or Late Filing
round off only the total. The penalty for late payment or underpayment of the tax is
10% of the tax due or $50, whichever is greater.
Example: Add two amounts ($1.29 + $3.21) to compute
the total ($4.50) to enter on a line. $4.50 is rounded to If no tax is due, DRS may impose a $50 penalty for the
$5.00 and entered on a line. late filing of any return or report required by law to be filed
with DRS.
Private Delivery Services Penalty for Failure to File
Your return will meet the timely filed and timely payment If you do not file your return and DRS files a return for you,
rules if the U.S. Postal Service cancellation date, or the the penalty for failure to file is 10% of the balance due or
date recorded or marked by a designated private delivery $50, whichever is greater. If you were required to file an
service (PDS), is on or before the due date. Not all services amended Form CT-706/709 and failed to do so, you will be
provided by the designated PDSs qualify. subject to a penalty.
Page 6
Waiver of Penalty waiver process, see Policy Statement 2010(1), Requests
To make a penalty waiver request, taxpayers must complete for Waiver of Civil Penalties.
and submit Form DRS-PW, Request for Waiver of Civil
Penalty, to DRS Penalty Waiver Unit. Taxpayers may mail Declaration
Form DRS-PW to the address listed below or fax it to the Anyone signing the return is declaring that the return
Penalty Waiver Unit at 860-297-4797. and any accompanying schedules and statements are
true, complete, and correct to the best of the signatory’s
Department of Revenue Services knowledge. The penalty for willfully delivering a false
Penalty Waiver Unit return or document to DRS is a fine of not more than
PO Box 5089 $5,000 or imprisonment for not more than five years, or
Hartford CT 06102-5089 both. The declaration of a paid preparer other than the
taxpayer is based on all information of which the preparer
DRS will not consider a penalty waiver request unless it is has any knowledge.
accompanied by a fully completed and properly executed
Form DRS-PW. For detailed information about the penalty
Getting Started
Connecticut estate and gift taxes are filed on Form CT- Section 1- Gift Tax
706/709, Connecticut Estate and Gift Tax Return. The
This section is used to report gifts made by a donor during
return is divided into three sections.
calendar year 2010. If the donor died during calendar year
The first section applies to filing the gift tax portion of the 2010, report the gifts made during calendar year 2010 in
return. The second section applies to filing the estate tax Section 2 - Estate Tax. See instructions on Page 16.
portion of the return. Your circumstances determine which
section you complete. The third section is used to calculate Section 2 - Estate Tax
the payment or refund amount. This section is used for the estate of a decedent dying
during calendar year 2010. Gifts made by the decedent
during calendar year 2010 are reportable in this section and
not in Section 1.
Page 7
If you are a resident individual, you are required to file Financial Disability
Form CT-706/709 if: If you, as the donor, are financially disabled as defined in
• You made a gift of real or tangible personal property IRC §6511(h)(2), the statute of limitations for having an
located in Connecticut or made a gift of intangible overpayment of Connecticut gift tax refunded to you is
property and the amount of your Connecticut taxable extended for as long as you are financially disabled. You
gifts entered on your Form CT-706/709, Schedule A, are financially disabled if you are unable to manage your
Line 9, is more than $0; or own affairs by reason of a medically determinable physical
• You made a gift of Connecticut farmland and valued or mental impairment that has lasted or can be expected to
it in accordance with Conn. Gen. Stat. §12-646a. See last for a continuous period of not less than 12 months. You
Schedule CT-709 Farmland. are not financially disabled during any period your spouse
If you are a nonresident individual, you are required to file or any other person is authorized to act on your behalf in
Form CT-706/709 if: financial matters.
• You made a gift of real or tangible personal property When to File
located in Connecticut and the amount of Connecticut
In general, Form CT-706/709 is due on or before April 15
taxable gifts entered on your Form CT-706/709,
of the year following the year the gifts were made unless
Schedule A, Line 9, is more than $0; or
an extension for filing Form CT-706/709 is granted.
• You made a gift of Connecticut farmland and valued
it in accordance with Conn. Gen. Stat. §12-646a. See If the due date falls on a Saturday, Sunday, or legal holiday,
Schedule CT-709 Farmland. the next business day is the due date.
Extension Requests
Residence
You may request an extension of time to file your
For purposes of the Connecticut gift tax:
Form CT-706/709 by filing Form CT-706/709 EXT,
Resident means any individual who is domiciled in Application for Estate and Gift Tax Return Filing Extension
Connecticut at the time he or she made gifts. and for Estate Tax Payment Extension. If you request an
Nonresident means any individual who is not domiciled in extension of time to file your federal gift tax return, you
Connecticut at the time he or she made gifts. do not have to provide an explanation for requesting an
extension of time to file your Form CT-706/709. If you do
Domicile is the place which an individual intends to be his
not request an extension of time to file your federal gift tax
or her permanent home and to which the individual intends
return, you must provide an explanation for requesting an
to return whenever absent.
extension of time to file your Form CT-706/709.
Person Responsible for Filing Return and Payment of all of the Connecticut gift tax you expect to
Paying Tax owe must accompany Form CT-706/709 EXT. Filing
If Form CT-706/709 must be filed, the donor is responsible Form CT-706/709 EXT only extends the time to file your
for filing Form CT-706/709 and paying the tax due. Connecticut gift tax return; it does not extend the time to
pay Connecticut gift tax. If the payment accompanying
If a donor becomes legally incompetent or dies before filing your Form CT-706/709 EXT is less than the gift tax
the return, the donor’s guardian, conservator, executor, or reported on your Form CT-706/709, you will owe interest
administrator is responsible for filing the return. If there and penalty. See Interest and Penalties on Page 6.
is no duly qualified executor or administrator, the donor’s
heirs, legatees, devisees, or distributees are required to If a taxpayer is unable to request an extension because of
pay the tax to the extent of the value of their inheritances, illness, absence, or other good cause, any person standing
bequests, devises, or distributive shares of the donor’s in a close personal or business relationship to the taxpayer
estate. (including an attorney, accountant, or enrolled agent) may
file the request on the taxpayer’s behalf.
If the gift tax is not paid when due, each donee is personally
liable for the tax to the extent of the value of the gift
received.
Page 8
Comparison Between
Federal Gift Tax and Connecticut Gift Tax
Gifts §§2701 to 2704, where they apply. Generally, the special
A gift is a transfer of property or interest in property valuation rules apply if a donor transfers certain property
without adequate consideration. For Connecticut gift tax to a member of his or her family and, immediately after the
purposes, a transfer is only treated as a gift if it is treated as transfer, retains or is deemed to have retained an interest
a gift for federal gift tax purposes. Some transfers treated in the property. For example, certain gifts of real property
as gifts for federal gift tax purposes are not treated as in which the donor retains a life estate and transfers a
gifts for Connecticut gift tax purposes. For example, real remainder interest to a member of his or her family are
property located outside Connecticut is not subject to the subject to the special valuation rules. Where the special
Connecticut gift tax. Gifts to which the Connecticut gift valuation rules apply, the value of the retained interest is
tax applies are gifts of real property and tangible personal disregarded in determining the value of the gift made to
property located in Connecticut whether the donor is a the family member. See IRC §2702. If a gift of farmland is
resident of Connecticut or a nonresident of Connecticut made, the donor may elect to use a valuation method other
and gifts of intangible personal property but only where than the federal valuation rules. See Gifts of Farmland on
the donor is a resident of Connecticut. Page 10.
Exclusions and Deductions Example: During calendar year 2010, Mary conveys
title to her house to her three children and either
For federal gift tax purposes, the first $13,000 of gifts
retains a life use for herself on the deed or does not
to a donee during the calendar year of a present interest
in property is excluded from the total amount of gifts. retain a life use for herself on the deed but continues
There is no annual exclusion for gifts of future interests. to occupy the residence. Mary does not receive any
A present interest in property is an unrestricted right to money or other type of consideration for the house
the immediate use, possession, or enjoyment of property from her children. Mary has made a gift of a future
or the income from the property. For Connecticut gift tax interest to her children. Because this is a gift of a
purposes, the same first $13,000 of gifts to a donee during future interest to her lineal descendants, it is subject
the calendar year of a present interest in property that was to the special valuation rules (IRC §§2702 et seq.).
excluded for federal gift tax purposes is excluded from the The value of Mary’s gift determined under the special
total amount of gifts, but only if that same first $13,000 of valuation rules is the property’s fair market value
gifts to the donee is gifts to which the Connecticut gift tax (less encumbrances). Because this is a gift of a future
applies. interest, annual exclusions do not apply.
For federal gift tax purposes, the first $134,000 of gifts
made to a spouse who is not a U.S. citizen during the Gift Splitting
calendar year of a present interest in property is excluded For federal gift tax purposes, if both spouses consent to gift
from the total amount of gifts. For Connecticut gift tax split, all gifts made to third parties during the calendar year,
purposes, the same first $134,000 of gifts to a spouse who whether made by one spouse alone or made partly by each
is not a U.S. citizen during the calendar year of a present spouse, are considered made one-half by each spouse (only
interest in property that was excluded for federal gift tax if at the time of the gift each spouse is a citizen or resident
purposes is excluded from the total amount of gifts, but of the U.S.). For federal purposes, the first $26,000 of gifts
only if that same first $134,000 of gifts to the spouse is of a present interest in property to a donee by consenting
gifts to which the Connecticut gift tax applies. spouses during the calendar year are excluded from the
For federal gift tax purposes, deductions are allowed for total amount of gifts. To gift split:
gifts to charitable organizations or to a spouse who is a • Spouses must be married to each other at the time the
U.S. citizen. For Connecticut gift tax purposes, deductions gifts were made for gift splitting to apply. If they are
are allowed for gifts to charitable organizations or to a subsequently divorced during the year, they may still gift
spouse who is a U.S. citizen, but only if those gifts are split for gifts made while they were married so long as
gifts to which the Connecticut gift tax applies. neither marries anyone else during the year;
• Spouses must both be citizens or residents of the United
Valuation
States on the date of the gift; and
In general, the valuation rules used for federal gift tax • One spouse may not create a general power of
purposes are also used for Connecticut gift tax purposes. appointment in the other spouse over the property
These rules include the special valuation rules of IRC transferred.
Page 9
The executor or administrator for a deceased spouse’s estate several means one or both parties can be held responsible
or the guardian of a legally incompetent spouse may sign to pay the full amount of the tax due.
the consent. The consent of an executor or administrator is
not effective for gifts made by the surviving spouse during No Joint Gift Tax Return
that portion of the calendar year his or her spouse was A married couple may not file a joint gift tax return for
deceased. either federal gift tax purposes or Connecticut gift tax
A husband and wife who have both consented to gift split purposes.
for federal gift tax purposes are deemed to have both
consented to gift split for Connecticut gift tax purposes and
Applicable Credit Amount
are required to gift split for Connecticut gift tax purposes. An applicable credit amount of $1 million is allowed
The rules that apply to determine whether and which gifts against the federal gift tax. There is no comparable credit
may be gift split for federal gift tax purposes also apply for allowable against the Connecticut gift tax. However,
Connecticut gift tax purposes. If a husband and wife have Connecticut gift tax is payable only once the aggregate
not both consented to gift split for federal gift tax purposes, amount of Connecticut taxable gifts made by the donor in
they may not gift split for Connecticut gift tax purposes. his or her lifetime during all calendar years beginning on
or after January 1, 2005, exceeds $3.5 million.
The Connecticut gift tax liability of the spouses deemed to
have consented to gift split is joint and several. Joint and
Gifts of Farmland
Transfers of Farmland or Change of descendant’s spouse, or if the land is no longer classified
Classification as farmland under Conn. Gen. Stat. §12-107c, when the
classification of the land was changed.
If land classified as farmland under Conn. Gen. Stat.§12-107c
is transferred to a donee who is a lineal descendant or that Attach a check for the additional tax to a copy of Schedule
descendant’s spouse, the land may be valued based on its CT-709 Farmland provided by the donor to the donee and
current use as farmland. If within ten years of the transfer the donee’s written statement.
the donee transfers this farmland to a person other than Mail to:
the donee’s lineal descendant or his or her descendant’s Department of Revenue Services
spouse or the land is no longer classified as farmland, the PO Box 2978
donee will be liable for the difference between the tax that
Hartford CT 06104-2978
was due from the donor and the tax that would have been
due if the land was valued at its fair market value. The check should be payable to Commissioner of
A lineal descendant is a person in the direct line of descent Revenue Services.
such as a child or grandchild. A lineal descendant does not Do not send cash. To ensure payment is applied to the
include a corporation, partnership, or trust. account, write “Schedule CT-709 Farmland” and your
The donor who claims special valuation on a gift of SSN, optional, on the front of your check. Be sure to sign
farmland must provide a copy of Schedule CT-709 your check and paper clip it to the front of your return.
Farmland to the donee so the donee knows the amount of DRS may submit your check to your bank electronically.
any additional tax that may become due. If the tax is not paid on time, the penalty is 10% of the
balance due or $50, whichever is greater. Interest is
Due Date of Additional Tax Liability
charged on the underpayment of the tax at the rate of 1%
If within ten years a gift of farmland is transferred to a per month or fraction of a month.
person other than the donee’s lineal descendant or his or her
The Commissioner may, for good cause, extend the
descendant’s spouse or the land is no longer classified as
time for payment of the tax if the descendant or the
farmland under Conn. Gen. Stat. §12-107c, the donee must
descendant’s spouse files a written application with the
submit to DRS a copy of the Schedule CT-709 Farmland
Commissioner on or before the 60-day period expires. If
the original donor provided to the donee. The additional
the land was transferred to the donee’s lineal descendant
tax entered on Schedule CT-709 Farmland, Column F,
or his or her descendant’s spouse, the Commissioner may,
must be paid no later than 60 days following the transfer
for good cause, extend the time for payment of the tax if
or the change in classification. The donee must provide a
the descendant or the descendant’s spouse files a written
written statement indicating when the land was transferred
application with the Commissioner on or before the
to a person other than the donee’s lineal descendant or that
60-day period expires.
Page 10
Recordkeeping
For gifts of farmland, you must provide a copy of Schedule
CT-709 Farmland to your donee(s) and advise your
donee(s) to keep the copy for ten years.
Page 11
executor, or administrator, as the case may be, may sign Mailing Your Return
the return on the donor’s behalf. Retain a copy of this return for your records. Attach to this
Paid Preparer Information return a complete copy of federal Form 709, United States
Gift (and Generation-Skipping Transfer) Tax Return,
Anyone you pay to prepare your return must sign and date including all attachments and other documents. See Form
it. Paid preparers must also enter their SSN or Preparer CT-706/709 Gift Tax Attachments on Page 16.
Tax Identification Number (PTIN), their firm’s Federal
Employer Identification Number (FEIN), and their firm’s Mail to:
name and address in the spaces provided. Department of Revenue Services
PO Box 2978
Hartford CT 06104-2978
Schedule A – Overview
General Instructions Do not enter gifts to your spouse on Schedule A if all the
The information for each gift on Schedule A should terminable interests you gave to your spouse qualify as life
generally be identical to the information reported on federal estates with power of appointment.
Form 709, Schedule A. However, only those gifts to which However, if you gave your spouse any terminable interest
the Connecticut gift tax applies should be reported on that does not qualify as a life estate with power of
Form CT-706/709, Schedule A. For gifts of land classified appointment, you must report on Schedule A all gifts of
as farmland under Conn. Gen. Stat. §12-107c, the land’s terminable interests you made to your spouse during the
value as farmland may differ from that reported on federal year.
Form 709, Schedule A. See Gifts of Farmland on Page 10.
Gift Splitting With Your Spouse
If the total amount of Connecticut gifts of present interests
to any donee is more than $13,000 in the calendar year, You are not permitted to gift split for Connecticut gift tax
you must enter all gifts you made during the year to or on purposes if you do not consent to gift split for federal tax
behalf of that donee. purposes.
If the total amount of Connecticut gifts to a donee is You are required to gift split for Connecticut gift tax
$13,000 or less, do not enter on Schedule A any gifts you purposes if you consent to gift split for federal gift tax
made to that donee unless the Connecticut gift is of a future purposes.
interest or of a present interest where the annual exclusion Enter on Schedule A the entire value of every gift you made
does not apply to the Connecticut gift. during that portion of the calendar year you were married
You must always enter all gifts of future interests you even if the gift’s value will be less than $13,000. See Gift
made during the calendar year regardless of value. There is Splitting on Page 9.
no annual exclusion for gifts of future interests. See Gifts If you elected gift splitting and your spouse made gifts, list
on Page 9. those gifts in the space below Gifts made by spouse.
Contributions to Qualified State Tuition Terminable Interests
Programs Generally, you cannot take the marital deduction if the
An election may be made under IRC §529(c)(2)(B) to treat gift to your spouse is a terminable interest. In most cases,
any transfers made this year to a qualified state tuition a terminable interest is nondeductible if someone other
program as made ratably over a five-year period beginning than the donee spouse will have an interest in the property
this year. See the instructions for Line 14 on Page 15. following the termination of the donee spouse’s interest.
Some examples of terminable interests are:
Gifts to Your Spouse
• A life estate;
Enter gifts to your spouse on Schedule A if:
• An estate for a specified number of years; or
• You gave a gift of a terminable interest to your spouse;
• Any other property interest that after a period of time
• You gave a gift of a terminable future interest to your may terminate or fail.
spouse; or
If you transfer an interest to your spouse as sole joint
• Your spouse was not a citizen of the United States at the
tenant with yourself or as a tenant by the entirety, the
time of the gift.
interest is not considered a terminable interest just because
the tenancy may be severed.
Page 12
Life Estate With Power of Appointment has a power to appoint one-half of the entire interest, then
You may deduct, without a federal election, a gift of a only one-half qualifies for the marital deduction.
terminable interest if all four of the following requirements
Election to Deduct Qualified Terminable
are met:
Interest Property (QTIP)
1. Your spouse is entitled for life to all of the income from
the entire interest; You may elect, for federal gift tax purposes, to deduct a
gift of a terminable interest if it meets requirements 1, 2,
2. The income is paid yearly or more often;
and 4 under Life Estate With Power of Appointment even
3. Your spouse has the unlimited power, while he or she though it does not meet requirement 3.
is alive or by will, to appoint the entire interest in all
circumstances; and If you make this federal election, you must check the box
on Schedule A, Line 16. You may not check the box if you
4. No part of the entire interest is subject to another person’s
did not make the election for federal gift tax purposes.
power of appointment except to appoint it to your spouse.
If either the right to income or the power of appointment Charitable Remainder Trusts
given to your spouse pertains only to a specific portion of If you made a gift to a charitable remainder trust and your
the property interest, the marital deduction is allowed only spouse is the only noncharitable beneficiary other than
to the extent that the rights of your spouse meet all four you, the interest you gave to your spouse is not considered
of the conditions listed. For example, if your spouse is to a terminable interest gift and, therefore, should not be
receive all of the income from the entire interest, but only reported on Form CT-706/709, Schedule A.
Page 14
Line 12 Example: In year 1, when the annual exclusion amount
If you were married to one another for the entire calendar under IRC §2503(b) is $13,000, P makes a contribution
year, check the Yes box. If you were married for only part of $70,000 to a qualified state tuition program for the
of the year, check the No box. benefit of P’s child. P elects under IRC §529(c)(2)(B) to
account for the gift ratably over a five-year period begin-
Also, check the box that explains the change in your ning with the calendar year of contribution. P is treated
marital status during the year and give the date you were as making an excludible gift of $13,000 in each of years
married, divorced, or widowed. 1 through 5 and a taxable gift of $5,000 is reported in
year 1.
Line 13
Check this box if you are making a gift of land classified Line 15
as farmland under Conn. Gen. Stat. §12-107c to a lineal Check the box if you are a party to a civil union recognized
descendant or that descendant’s spouse and you are using under Connecticut law or a marriage recognized under
a value based on its current use as farmland. Attach Public Act 2009-13.
an appraisal or other document showing an adequate
explanation of value based upon its current use and Line 16
Schedule CT-709 Farmland. If no appraisal is attached to Check the box if you elected under IRC §2523(f) to
show how the property is valued, explain in detail how it include gifts of qualified terminable interest property as
was determined. gifts to your spouse for which a marital deduction was
claimed under IRC §2523. Enter the item numbers from
Line 14 Form CT-706/709, Schedule A, of the gifts for which you
Check this box if, for federal gift tax purposes, you elected made this election on the space provided.
to treat certain contributions made during calendar year
2010 to qualified state tuition programs as being made Line 17
ratably over a five-year period. If your total contributions Check the box if you elected under IRC §2523(f)(6) not to
during calendar year 2010 are: treat as qualified terminable interest property any joint and
Less than or equal to $65,000: survivor annuity where only you and your spouse have the
• Report 20% of your total contributions on your 2010 right to receive payments before the death of the last of you
Form CT-706/709; and to die. Enter the item numbers from Form CT-706/709,
Schedule A, for the annuity(ies) for which you made this
• Report 20% of your total contributions on your Form
election in the space provided.
CT-706/709 for calendar years 2011, 2012, 2013, and
2014. Any annuities entered in the space provided on Line 17
More than $65,000: may not be entered on Schedule A, Line 8. Any annuities
not listed in the space provided on Line 17 must be entered
• Report on your 2010 Form CT-706/709 the amount in
on Schedule A, Line 4. If there is more than one joint and
excess of $65,000 plus $13,000 (20% of $65,000); and
survivor annuity, the election under IRC §2523(f)(6) may,
• Report $13,000 (20% of $65,000) on your Form CT-706/709 but is not required to, cover all of them. Once made, the
for calendar years 2011, 2012, 2013, and 2014. election is irrevocable.
Column B
For gifts made during each of the calendar years 2005
through 2009, enter the amounts from the 2005 through
2009 Forms CT-706/709, Section 1, Line 1.
Page 15
Form CT-706/709 Gift Tax Attachments
• Attach a complete copy of your federal Form 709, For single premium or paid-up policies, where the
United States Gift (and Generation-Skipping Transfer) surrender value of the policy exceeds its replacement
Tax Return, including all attachments. cost, the true economic value of the policy is greater
• A donor claiming special valuation on a gift of farmland than the amount shown on federal Form 712, Line 59.
must attach Schedule CT-709 Farmland to provide the In these situations, you should report the true economic
fair market value of the farmland based on its highest value of the policy.
and best use value at the time of the gift. The donor must • Attach any other documents, such as appraisals, required
also provide a copy of Schedule CT-709 Farmland to the for adequate explanation of value. If no appraisal is
donee(s). attached to show how property is valued, explain in
• For gifts of stock of closely held or inactive corporations, detail how value was determined.
attach the balance sheet for the period nearest the date of • If claiming a civil union partner deduction, you must
the gift, statements of net earnings or operating results attach a completed pro forma federal Form 709 completed
and dividends paid for each of the five preceding years, as if federal tax law allowed a marital deduction to civil
and a concise statement of the method of valuation. union partners and a copy of the federal Form 709 that
• For each gift of a life insurance policy, attach a copy of was actually filed with the IRS.
federal Form 712, Life Insurance Statement.
Page 16
Assets which must be reported include: If the decedent is claimed to be a nonresident, the estate
• Tangible personal property* wherever located; must also file Form C-3 either with DRS or the probate
court depending on which has jurisdiction over the estate.
• Real property** wherever located;
• All intangible personal property*** wherever located; Release of Estate Tax Lien Required for
• Real property located in Connecticut**; and Sale of Connecticut Real Property
• Tangible personal property* located in Connecticut. For an estate required to file Form CT-706/709 that includes
* Tangible personal property includes but is not limited a decedent’s interest in Connecticut real property, prior to
to antiques, art collections, automobiles, boats, the sale of the interest in the Connecticut real property, its
clothing, coin collections, household furniture and Connecticut attorney or corporate fiduciary must request a
furnishings, jewelry, and stamp collections. release of the estate tax lien provided in Conn. Gen. Stat.
** The description of the real property should include the §12-398 (d) by filing a completed Form CT-4422 UGE,
acreage and whether it is a home, rental, commercial, Application for Certificate Releasing Connecticut Estate
farm, or vacant land. Tax Lien, with DRS. If the estate’s payment of the estate tax
is sufficiently provided for, DRS will issue to the corporate
*** Intangible personal property includes but is not limited to
fiduciary or Connecticut attorney its signed and sealed Form
bank accounts, cash, stocks, bonds, pensions, copyrights,
CT-792 UGE evidencing the discharge of the estate tax lien.
interest in estates of other decedents, royalties, mortgages,
notes, partnership interests, remainder interest in trusts Executor
and estates, and unincorporated businesses.
The term executor means the executor, personal
All tangible personal property the decedent owned at death representative, or administrator of the decedent estate. If
must be reported at fair market value. For real estate, the none of these is appointed, qualified, and acting in this state,
fair market value may be determined through a written a survivor or transferee in possession of estate assets may
appraisal or by a comparable market analysis prepared be appointed by the probate court for the district in which
by a realtor. For stocks quoted on a stock exchange, use the decedent resided or if the decedent was a nonresident
the mean between the high and the low or bid and asked of this state, in the probate court in which the decedent’s
price at the date of death. For bank accounts, be sure that Connecticut real property or tangible personal property, or
all interest has been posted as of the date of death. For both, was located.
U.S. Savings Bonds, use the value at death, not the face
amount. Do not reduce the reported fair market value of When to File
any property by the amount of any mortgages, liens, or Form CT-706/709 for Connecticut estate tax must be filed
encumbrances. Attach required supporting documents to within six months after the decedent’s date of death unless
the return. an extension of time to file is requested.
Residence Use Form CT-706/709 EXT, Application for Estate
For purposes of the Connecticut estate tax: and Gift Tax Return Filing Extension and for Estate Tax
Payment Extension, to apply for an extension of time to
Resident means the estate of any individual who is file.
domiciled in Connecticut at the time of his or her death.
Nonresident means the estate of any individual who is not Who Must File
domiciled in Connecticut at the time of his or her death. The executor(s) of the estate must sign and date Form
Domicile is the place which an individual intends to be his CT-706/709. If there is more than one executor, all must
or her permanent home and to which the individual intends sign the return and all are liable for tax, interest, and
to return whenever absent. Refer to the general instructions penalty. See Executor above.
on Form C-3, State of Connecticut Domicile Declaration.
Line 8 Line 18
Enter the current year Connecticut taxable gifts made by Prior payment amount: Include amount paid on Line 2 of
the decedent from Schedule A, Line 9. If the decedent Form CT-706/709 EXT.
made Connecticut taxable gifts during calendar year Amended returns: Include amount paid with your
2010, those gifts must be reported on Schedule A. See original return.
Schedule A - Overview on Page 12.
Line 19
Line 9 If the amount on Line 18 is greater than Line 17, enter the
Enter total from Schedule B, Column B. amount overpaid.
Page 18
Line 20 Paid Preparer Information
If the amount on Line 17 is greater than Line 18, enter the Anyone you pay to prepare your return must sign and date
balance of tax due. it. Paid preparers must also enter their SSN or Preparer
Tax Identification Number (PTIN), their firm’s Federal
Line 21 and Line 22 Employer Identification Number (FEIN), and their firm’s
If you are making a late payment or filing the return after name and address in the spaces provided.
the due date, see Interest and Penalties on Page 6.
Due Date
Line 23 Due date is six months after the decedent’s date of death.
Add Lines 20, 21, and 22. This is your total amount due.
Mailing Your Return
Payment Information
A copy of this return must be filed with the appropriate
Pay the amount on Line 23 with this return. Connecticut probate court.
Do not send cash. Make your check payable to Retain a copy of this return for your records. Attach to this
Commissioner of Revenue Services. To ensure payment return a complete copy of federal Forms 706 and 709, if
is applied to your account, write “2010 Form CT-706/709” applicable, including all attachments.
and the decedent’s Social Security Number, optional, on
the front of your check. Be sure to sign your check and Mail to:
paper clip it to the front of your return. DRS may submit Department of Revenue Services
your check to your bank electronically. PO Box 2978
Hartford CT 06104-2978
Page 19
a prior estate that made a QTIP election for Connecticut Lines 9a through 9d
estate tax purposes only, check Yes. Enter the name of each state and the value for federal estate
IRC §2044 type property means that a property would tax purposes of real or tangible personal property located
have qualified as IRC §2044 property from a prior estate in that state which is not subject to death taxes of the state.
had a QTIP election under IRC §2056(b)(7) been made by Schedule D, Part 2, applies to real or tangible personal
the prior estate. property located in other states that do not by statute
impose death taxes. In addition, it also applies to real
Schedule D - Estate Tax Credits (Resident or tangible personal property located in other states that
Estates Only) by statute impose death taxes, but the property of this
particular estate is not subject to those death taxes.
Part 1 - Credit for Real or Tangible Personal
Property Located in Another State and Subject Line 9
to Death Tax of That State Add Lines 9a through 9d. If necessary, attach additional
Line 1 sheets and include amounts in total.
Enter the tax due amount from Section 2, Line 11.
Line 10
Lines 2a through 2d Enter the total gross estate for federal estate tax purposes
Enter the name of each state and tax amount paid to that from Section 2, Line 5.
state for any death taxes (estate, inheritance, legacy, or
succession taxes) for which a credit is being claimed. Do Line 11
not include interest or penalty paid to those states. Attach Divide Line 9 by Line 1. Round to four decimal places.
a copy of each state tax return for which a credit is being
claimed to Form CT-706/709. Line 12
Multiply Line 8 by Line 11.
Line 2
Add Lines 2a through 2d. If necessary, attach additional Line 13
sheets and include amounts in total. Enter amount from Part 1, Line 7.
Line 3 Line 14
Enter the total gross estate for federal estate tax purposes Add Line 12 and Line 13. Enter the amount here and in
from Section 2, Line 5. Section 3, Line 15.
Page 20
Amended Form CT-706/709 Tax Returns
Use Form CT-706/709 to amend a return you already filed. If you overpaid your Connecticut gift or estate tax, you
Include a statement explaining why the return is being must amend Form CT-706/709 within three years after
amended and check the “Amended Return” box on the the due date for which the overpayment was made. If
front of the return. Enter the amount paid with the original additional tax is due, interest applies. See Interest and
return on Line 18. Penalties on Page 6.
The following circumstances require filing an amended Form CT-706/709 for gift or estate tax.
1. The IRS or federal courts change or correct File no later than 90 days after the final determination. If you
the federal gift or estate tax return and file an amended Form CT-706/709 no later than 90 days after the
the change or correction results in the final determination, any Connecticut gift or estate tax overpayment
Connecticut gift or estate tax being overpaid resulting from the final determination will be refunded even if the
or underpaid. Connecticut statute of limitations has otherwise expired.
2. The donor files a timely amended federal File no later than 90 days after the date of filing the timely
gift or estate tax return and the amendment amended federal gift or estate tax return. If you file an amended
results in the Connecticut gift or estate tax Form CT-706/709 no later than 90 days after the date of filing the
being overpaid or underpaid. timely amended federal gift or estate tax return, any Connecticut
gift or estate tax overpayment resulting from filing the timely
amended federal gift or estate tax return will be refunded even if
the Connecticut statute of limitations has otherwise expired.
3. The donor made a mistake or omission on File no later than three years after the due date for which
Form CT-706/709 and the mistake or the overpayment was made.
omission results in the Connecticut gift or
estate tax being overpaid or underpaid.
Page 21
Notes
Page 22
Department of Revenue Services
State of Connecticut
25 Sigourney Street Ste 2
Hartford CT 06106-5032
Internet
Internet
The TSC includes a comprehensive FAQ database with Connecticut forms and publications may be
more than 600 searchable answers. Search by category, tax viewed, downloaded, or printed by visiting
type, keyword, or phrase. www.ct.gov/DRS the DRS website.
For telephone assistance, call our Taxpayer Services 1-800-382-9463 (Connecticut calls outside
Phone
Phone
Division at 1-800-382-9463 (Connecticut calls outside the the Greater Hartford calling area only) and
Greater Hartford calling area only); or 860-297-5962 (from select Option 2; or 860-297-4753 (from
anywhere). anywhere).
Send routine tax questions to [email protected] (do not Email requests, including your name,
Email
Email
send account related inquiries). For account-related questions, address (street, city, state, and ZIP code), and
including bill and refund inquiries, use the Secure Mailbox the name or number of the tax product to
feature by logging into the DRS electronic TSC. [email protected]
Free personal taxpayer assistance and forms are available by visiting our Hartford office at 25 Sigourney Street,
Walk-In
Walk-In
Hartford CT. Walk-in assistance is available Monday through Friday, 8:30 a.m. to 4:30 p.m. (arrive by 4:00
p.m.) Directions to DRS Hartford office is available using our phone menu or visiting the DRS website. If you
require special accommodations, please advise the DRS representative.