Taxation & Estate Planning

Illinois Estate Tax Case

By Joel A. Schoenmeyer

This is clever -- the Illinois Estate and Generation-Skipping Transfer Tax Act (35 ILCS 405/) requires the payment of tax equal to the "state tax credit." That's a defined term in Section 2(a) of the Act:

"State tax credit" means:
(a) For persons dying on or after January 1, 2003 and through December 31, 2005, an amount equal to the full credit calculable under Section 2011 or Section 2604 of the Internal Revenue Code as the credit would have been computed and allowed under the Internal Revenue Code as in effect on December 31, 2001....

The estate in this First District Court of Appeals case argued that no Illinois estate tax was due because it did not claim a credit under Section 2011 or Section 2604. Since no credit was "allowed," the state tax credit (and therefore, the Illinois estate tax) should be... zero. The court disagreed.

Full post as published by Death and Taxes Blog on March 19, 2009 (boomark / email).