Sec. 12-349. Gross taxable estate. - Connecticut Statutes

      Sec. 12-349. Gross taxable estate. (a) All property in estate valued at fair market value, except farm land under certain conditions allowing valuation according to use. (1) The gross estate for the purpose of the tax imposed by the provisions of this chapter shall be the total of the fair market value of all the property transferred subject to tax under the provisions of part I, except that the value of any real property in the gross estate classified as farm land in accordance with section 12-107c at the time of the decedent's death shall be determined for purposes of said tax in accordance with the provisions applicable to farm land in section 12-63, provided (A) such farm land is transferred to any of the beneficiaries or distributees included in the list of beneficiaries or distributees in classes AA, A and B as provided in section 12-344, (B) such farm land was owned by the decedent or any of the beneficiaries or distributees in classes AA, A and B as provided in section 12-344 for an aggregate of no less than five years during the eight years immediately preceding the decedent's death, and (C) the decedent or any such beneficiary or distributee shall have engaged in active and substantial participation in farming or agricultural operations directly related to such farm land, as determined by the assessor, for an aggregate of no less than five years during the eight years immediately preceding the decedent's death.

      (2) Where real property classified at the time of the decedent's death as farm land in accordance with section 12-107c is owned by a partnership, corporation or trust engaged in farming or agricultural operations, and, at the time of the decedent's death, (A) the sole partners, shareholders or beneficiaries, as the case may be, of such partnership, corporation or trust are the decedent and any persons who would be classified as transferees under class AA, A or B as provided in section 12-344, whether or not such persons are in fact beneficiaries or distributees of the decedent, and (B) all of the decedent's interest in such partnership, corporation or trust passes to transferees under class AA, A or B as provided in section 12-344, the interest of the decedent and of such beneficiaries and distributees in such partnership, corporation or trust shall be treated in the same manner for purposes of this chapter as if the interest of the decedent and such beneficiaries and distributees was in real property in the gross estate classified as farm land in accordance with section 12-107c.

      (b) Exclusion from estate for value of payments to beneficiary after decedent's death under retirement or profit-sharing plan, except portion of payments attributable to contributions by decedent. There shall be excluded from the gross estate the value of an annuity or other payment receivable after the death of the decedent by any beneficiary, other than the decedent's estate, under an employees' trust or plan, or under a contract purchased by an employees' trust or plan, forming part of a pension, stock bonus or profit-sharing plan, or under a retirement annuity contract purchased by an employer pursuant to a plan, provided at the time of decedent's separation from employment, by death or otherwise, or at the time of termination of the plan, if earlier, payments to or in respect of such trust, plan or annuity were exempt from federal income taxation under the United States Internal Revenue Code. If such amounts payable after the death of the decedent under a plan above described are attributable to any extent to payments or contributions made by the decedent, no exclusion shall be allowed for that part of the value of such amounts in the proportion that the total payments or contributions made by the decedent bears to the total payments or contributions made. For purposes of the preceding sentence, contributions or payments made by the decedent's employer or former employer shall not be considered to be contributed by the decedent, if made to or in respect to a trust, plan or annuity exempt from federal income taxation under the United States Internal Revenue Code.

      (c) Exclusion from estate for value of payments receivable after decedent's death under Social Security, Railroad Retirement and certain survivor benefits for retired servicemen. There shall be excluded from the gross taxable estate the value of any payments receivable after the death of the decedent by other persons under the provisions of the Federal Social Security Act and the Railroad Retirement Act of 1937, as the same have been and may be amended from time to time, and with respect to persons dying on or after June 8, 1978, the value of any annuity payments receivable by an eligible survivor, upon the death of a retired serviceman, under the "Retired Serviceman's Family Protection Plan" or the "Survivor Benefit Plan" for retired servicemen as provided in Chapter 73 of Title 10 of the United States Code, irrespective of whether such annuity payments are attributable to any extent to payments or contributions made by the decedent.

      (d) Exclusion from gross estate for value of payments receivable after decedent's death under self-employed pension plan established in accordance with Internal Revenue Code requirements. There shall be excluded from the gross taxable estate the value of any payments receivable after the death of the decedent by any beneficiary, other than the decedent's estate, under a pension plan for self-employed individuals as may be established pursuant to Section 401(c) of the Internal Revenue Code and regulations related thereto, and with respect to which payments to the credit of such plan were exempt from federal income tax.

      (e) Imposition of tax when farm land in gross estate, valued on basis of farm use for purposes of gross taxable estate, is sold or converted to other use within ten years after decedent's death. (1) If, within ten years immediately following the death of the decedent, real property in the gross estate of the decedent, classified as farm land in accordance with section 12-107c and the value of which, for purposes of the tax imposed under this chapter, was determined in accordance with provisions applicable to farm land in section 12-63 as provided in subsection (a) of this section, is transferred to anyone other than a beneficiary or distributee in class AA, A or B as provided in section 12-344 or is no longer classified as farm land in accordance with section 12-107c, such beneficiary or distributee shall be liable for a tax applicable to such transfer or change in classification. Said tax shall be in an amount equal to the difference between the amount of tax paid under this chapter with respect to such farm land and the amount of tax which would have been paid if such farm land had been assessed at fair market value for purposes of determining the amount of tax under this chapter, and accordingly, the succession tax return of the decedent shall include, in such manner as required by the Commissioner of Revenue Services for purposes of this section, a declaration, prescribed as to form by the Commissioner of Revenue Services and bearing notice to the effect that false statements made in such declaration are punishable, as to the fair market value of such farm land, based on its highest and best use value, as of the date of death of the decedent. Said tax shall be paid to the Commissioner of Revenue Services within sixty days following the date of such transfer or change in classification, and if not so paid shall bear interest at the rate of twelve per cent per annum, commencing at the expiration of such sixty days, until paid. The Commissioner of Revenue Services may, for cause shown, on written application of the beneficiary or distributee, filed with said commissioner at or before the expiration of such sixty days, extend the time for payment of said tax or any part thereof.

      (2) Said tax imposed under the provisions of subdivision (1) of this subsection shall be a lien in favor of the state of Connecticut upon such real property so valued as farm land for purposes of determining the gross estate of the decedent as provided in subsection (a) of this section and, following the death of the decedent, transferred or changed in respect to use, resulting in a change in the classification of such property as farm land so as to be subject to said tax, from the date on which such transfer or change in classification becomes effective until (A) the expiration of ten years immediately following the death of the decedent, if there has been no such transfer or change in classification during said period of ten years or (B) in the event of such a transfer or change in classification resulting in the imposition of tax as provided in said subdivision (1), payment of any tax due in accordance with this subdivision plus interest and costs that may accrue in addition thereto, provided such lien shall not be valid as against any lienor, mortgagee, judgment creditor or bona fide purchaser, when they have no notice, unless and until notice of such lien is filed or recorded in the town clerk's office or place where mortgages, liens and conveyances of such property are required by statute to be filed or recorded.

      (3) Where real property classified at the time of the decedent's death as farm land in accordance with section 12-107c is owned by a partnership, corporation or trust engaged in farming or agricultural operations, and, at the time of the decedent's death, the sole partners, shareholders or beneficiaries, as the case may be, of such partnership, corporation or trust, are the decedent and any persons who would be classified as transferees under class AA, A or B as provided in section 12-344, whether or not such persons are in fact beneficiaries or distributees of the decedent, any transfer of an interest in such partnership, corporation or trust to anyone other than a beneficiary or distributee in class AA, A or B as provided in section 12-344 shall be treated in the same manner for purposes of this chapter as a transfer of real property in the gross estate classified as farm land in accordance with section 12-107c to anyone other than a beneficiary or distributee in class AA, A or B as provided in section 12-344. Any change in the use of such farm land, by such partnership, corporation or trust, so that it is no longer classified as farm land in accordance with section 12-107c shall be treated in the same manner for purposes of this chapter as a change in the use of real property in the gross estate classified as farm land in accordance with section 12-107c, by the decedent's beneficiaries or distributees in class AA, A or B as provided in section 12-344, so that it is no longer so classified.

      (1949 Rev., S. 2029; 1961, P.A. 511, S. 1; February, 1965, P.A. 312, S. 1; 1972, P.A. 265, S. 8; P.A. 78-267, S. 1, 3; 78-303, S. 85, 136; 78-371, S. 1, 6; P.A. 87-459, S. 1, 2; P.A. 98-244, S. 14, 35; P.A. 00-174, S. 59, 83.)

      History: 1961 act added provisions regarding exclusion of certain annuities from gross estate; 1965 act excluded value of payments receivable after decedent's death by other persons under Social Security Act or Railroad Retirement Act of 1937, as amended, applicable to estates of persons dying on or after July 1, 1975 (all estates not within provisions of section are subject to succession or inheritance tax laws applicable before that date and continued in effect for that purpose); 1972 act deleted inclusion, in case of resident transferor, of "all gains made ... in reducing to possession choses in action, including notes and mortgages but not including corporate or governmental stock or bonds nor including income accruing after death", effective May 18, 1972, but retroactive to January 1, 1972, and applicable to estates of persons dying on or after that date (all estates of persons dying before January 1, 1972, are subject to succession tax laws applicable before that date and continued in force for that purpose); P.A. 78-267 excluded, on or after June 8, 1978, value of annuity payments receivable by eligible survivor under retired servicemen plans listed; P.A. 78-303 allowed substitution of commissioner of revenue services for tax commissioner pursuant to provisions of P.A. 77-614; P.A. 78-371 included provisions for determining tax on farm land and added Subsecs. (b) and (c) re transfer or reclassification of farm land, effective July 1, 1978, and applicable to estate of any person dying on or after that date (all estates of persons dying before July 1, 1978, are subject to succession and transfer tax laws applicable before that date); P.A. 87-459 added Subsec. (d) providing for exclusion from gross estate for the value of any payments receivable after decedent's death under a self-employed pension plan established in accordance with Internal Revenue Code requirements and combined Subsecs. (b) and (c) into a new Subsec. (e), effective June 30, 1987, and applicable to the estate of any decedent whose death occurs on or after July 1, 1987; P.A. 98-244 added Subsecs. (a)(2) and (e)(3) re property owned by a partnership, corporation or trust engaged in farming and made technical changes, effective June 8, 1998, and applicable to estates of persons dying on or after June 20, 1996; P.A. 00-174 amended Subsec. (e)(1) to delete a reference to sworn statement and add provisions re declaration, effective July 1, 2000.

      See Sec. 12-349a re effective date of this section.

      All taxable transfers, including ante mortem transfers, should be combined in determining gross taxable estate. 122 C. 126. Computation should be based on value of estate at date of death, not date of distribution. 126 C. 138. Cited. 141 C. 257.

      An individual retirement account (IRA) does not qualify for exclusion under statute as a "retirement annuity contract purchased by the employer" although established solely from proceeds of an employer funded pension fund. 38 CS 86.