67-8-417 - Payment of tax from estate Transfer or distribution of property. - Tennessee Statutes

67-8-417. Payment of tax from estate Transfer or distribution of property.

(a)  (1)  All taxes due by an estate under this part and part 3 of this chapter shall be paid by the executor, administrator or trustee out of the funds in the executor's, administrator's or trustee's hands for distribution, and no part of the property of an estate subject to this tax shall be distributed until the tax thereon has been paid; provided, that such executor, administrator or trustee may, with the written consent of the commissioner, be authorized to sell or transfer so much of the property of the estate as may be necessary to pay the tax.

     (2)  For the sole purpose of negotiating the sale of stocks, bonds and other registered assets, and real estate prior to the time of the payment of taxes due the state, the commissioner is authorized to waive the lien against the transferred property for taxes due by an estate pursuant to the provisions of § 67-1-1403; however, such waiver shall not affect the lien arising in favor of the state against the estate for such taxes due.

     (3)  Anything to the contrary notwithstanding, where a decedent's death terminates the decedent's interest in stocks, bonds or other registered assets, and/or real estate, which property was previously owned with the surviving spouse in a tenancy by the entirety or a joint tenancy with right of survivorship, the commissioner's waiver pursuant to subdivision (a)(2) is not required to permit the surviving spouse to transfer such property free of liens for taxes due by the decedent's estate under this part and part 3 of this chapter.

(b)  If any part of the gross estate consists of property, the value of which is includable in the gross estate by reason of § 67-8-304(10), relating to certain property for which a marital deduction was previously allowed, the decedent's estate shall be entitled to recover from the person receiving the property the amount by which the total tax under parts 3-5 of this chapter that has been paid exceeds the total tax under parts 3-5 of this chapter that would have been payable, if the value of such property had not been included in the gross estate.

(c)  Subsection (b) shall not apply, if the decedent otherwise directs by will.

(d)  For purposes of subsections (a)-(c), penalty and/or interest attributable to such taxes shall be considered to be a part of such taxes.

(e)  (1)  No person or persons, corporation or association, having in such person's, or its, possession or control, property of a decedent forming a part of such person's estate, or property transferred in any manner as to be subject to taxation under this part and part 3 of this chapter, shall deliver or transfer the property to representatives of the estate of the decedent, or to any other person or persons, corporation or association, or upon their order or request, unless notice of the time and place of the intended transfer or delivery be served upon the commissioner at least twenty (20) days prior thereto, nor shall any person deliver or transfer any such property without retaining a sufficient portion or amount thereof to pay any tax and interest that such property may be subject to a lien under this part and part 3 of this chapter, unless the commissioner consents in writing to such transfer.

     (2)  The prohibitions contained in this subsection (e) shall apply to the transfer by a corporation, association or joint stock company of the shares of its capital stock or other interest in the shares, including registered bonds or other registered securities.

     (3)  It is lawful for the commissioner to examine the property at the time of delivery or transfer.

     (4)  Failure to serve such notice, or failure to allow such examination, or failure to retain a sufficient amount to pay the tax and interest, shall, unless the commissioner consents to the transfer, render such person or persons, corporation or association liable to the payment of the amount of the tax for which a lien is imposed upon such property by this part and part 3 of this chapter, with interest thereon and the costs of any proceeding necessary for the enforcement of same in the courts of Tennessee; provided, that the penalty provided by this subsection (e) shall not apply to any insurance company that pays the proceeds of any policy of insurance on the life of the decedent after notifying the commissioner that such payment is to be made.

     (5)  The provisions of this subsection (e) shall not apply to the delivery or transfer of property held in a safe deposit box by a bank, savings and loan association or savings bank, such delivery or transfer being subject to the provisions of § 45-2-905; nor shall this subsection apply to the delivery or transfer of property held in an account of the bank, savings and loan association or savings bank, if the bank, savings and loan association or savings bank reports to the department of revenue such delivery or transfer involving the accounts of a decedent having an aggregate value of fifty thousand dollars ($50,000) or greater, excluding accounts owned jointly with a surviving spouse.

[Acts 1929 (E.S.), ch. 29, § 5(1), (4); Code 1932, §§ 1288, 1291; Acts 1983, ch. 73, § 13; T.C.A. (orig. ed.), §§ 30-1631, 30-1634; Acts 1990, ch. 627, § 1; 1993, ch. 33, § 1; 1998, ch. 1085, § 2.]