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Thursday, July 31, 2014

18:26-11.2 Executors and trustees to pay tax

N.J.A.C. 18:26-11.2 (2014)

§ 18:26-11.2 Executors and trustees to pay tax

   (a) An executor, administrator or trustee is not permitted to turn over any property subject to an executory devise, an estate in expectancy of any kind or character which is contingent or defeasible, or a power of appointment unless the New Jersey Inheritance Tax and the New Jersey Estate Tax including any interest due has been first paid to the Director.

(b) Any executor, administrator or trustee who transfers such property prior to having paid the tax and interest, if any, chargeable, becomes personally liable to the extent of all the assets of the estate subject to his control, for the payment of the tax including interest which is due on such transfers.

18:26-11.1 Consent to transfer; generally

N.J.A.C. 18:26-11.1 (2014)

§ 18:26-11.1 Consent to transfer; generally

   (a) Except as otherwise indicated in this chapter, no executor, administrator, trustee, individual, firm, association, partnership, organization or corporation including any banking institution, trust company or safe deposit company organized under the laws of New Jersey; National Bank operating in this State; Building and Loan or Savings and Loan Associations engaged in New Jersey; or credit unions chartered by the United States operating in this State, may release or transfer any real property or any tangible or intangible personal property which is subject to the Transfer Inheritance Tax and if the decedent died after December 31, 2001 which is subject to the estate tax, all or any part of which belongs to a resident decedent, whether held in the name of the decedent or otherwise, without first obtaining the written consent to such transfer or release from the Director.

(b) No waivers are required in estates of nonresident decedents, except for an inheritance tax waiver for real property located in the State of New Jersey.

1. There is, however, the necessity of definitely establishing to the satisfaction of the trustee, individual, firm, association, partnership, organization or corporation (its transfer agent) including any banking institution, trust company or safe deposit company organized under the laws of New Jersey; National Bank operating in this State; Building and Loan or Savings and Loan Associations engaged in New Jersey; or credit unions chartered by the United States operating in this State that the decedent was legally domiciled in a jurisdiction other than New Jersey. The proper procedure is for the personal representative of the estate to file with the proper party as aforesaid an affidavit establishing in some detail the facts as to domicile;

2. These should include place of residence and voting; social and business affiliations, where the last five income tax returns were filed prior to death; date of commencement and length of actual residence in place claimed as legal domicile; whether decedent formerly resided in New Jersey and, if so, what facts are relied upon to establish abandonment of New Jersey and intention not to return;

3. If from the proofs submitted to him the proper party as aforesaid is convinced that decedent was legally domiciled outside of New Jersey he may transfer the stock or obligation of the corporation or any other tangible or intangible personal property without the written consent of the Director, Division of Taxation, keeping the affidavit in his permanent files as authority for the action taken.

(c) No inheritance tax waivers are required to be issued by the Director in the case of certain transfers to the surviving spouse of a New Jersey domiciled decedent who died on or after January 1, 1985, or a surviving civil union partner of a New Jersey domiciled decedent who died on or after February 19, 2007, or to a registered domestic partner of a New Jersey domiciled decedent who died on or after July 10, 2004. In order to satisfy a corporation (its transfer agent) including any banking institution, trust company organized under the laws of New Jersey, national bank operating in this State, building and loan or savings and loan association in New Jersey, or credit union chartered by the United States operating in this State that intangible assets may be released to the surviving spouse/civil union partner or domestic partner, an affidavit of waiver (Form L-8) can be executed by the surviving spouse/civil union partner or domestic partner or the personal representative of the decedent's estate.

1. If two or more executors or administrators qualify, the affidavit may be executed by one of them.

2. The decedent's surviving spouse/civil union partner can execute an affidavit (Form L-8) in all cases where under the terms of the account or instrument and applicable State law the spouse/civil union partner has the right of survivorship or is the named beneficiary. Letters testamentary or of administration are not required to be attached as part of the affidavit when executed by the surviving spouse/civil union partner, except as provided in (c)3 below.

3. Where the surviving spouse/civil union partner has qualified as executor or administrator of the decedent's estate, intangible assets which pass to the spouse/civil union partner under a will or the law of intestate distribution can be released by the affidavit together with other assets described in (c)2 above, provided that the spouse's/civil union partner's letters testamentary or of administration are attached and made a part of the affidavit as provided in (c)1 above. Where the spouse/civil union partner has not qualified as an executor or administrator of the decedent's estate, only intangible assets may be released by the affidavit in accordance with (c)2 above.

4. A separate affidavit is required for each institution, organization or corporation releasing assets to a surviving spouse/civil union partner.

5. The affidavit of waiver by the surviving spouse/civil union partner cannot be used for real property and tangible personal property transfers from a decedent to a surviving spouse/civil union partner.

6. Estate tax waivers are required if the decedent died after December 31, 2001 except as provided in (e) below. Estate tax waivers are not required if a decedent died on or prior to December 31, 2001.

(d) No inheritance tax waivers are required to be issued by the Director in case of certain transfers to the following Class "A" transferees in the estate of New Jersey domiciled decedent who died on or after July 1, 1988: a father, mother, grandparent, grandchild, a child or children of a decedent, including any stepchild of a decedent or child or children adopted by a decedent or the issue of any child or legally adopted child of a decedent. In order to satisfy a corporation (its transfer agent) including any banking institution, trust company organized under the laws of New Jersey, national bank operating in this State, building and loan or savings and loan association in New Jersey, or credit union chartered by the United States operating in this State that intangible assets may be released to the Class "A" transferee, an affidavit of waiver can be executed by the Class "A" transferee or the personal representative of the decedent's estate.

1. If two or more executors or administrators qualify, the affidavit may be executed by one of them.

2. The Class "A" transferee can execute an affidavit in all cases where under the terms of the account or instrument and applicable State law the Class "A" transferee has the right of survivorship or is the named beneficiary. Letters testamentary or of administration are not required to be attached as part of the affidavit when executed by the Class "A" transferee, except as provided in (d)3 below.

3. Where the Class "A" transferee has qualified as executor or administrator of the decedent's estate, intangible assets which pass to the Class "A" transferee under a will or law of intestate distribution can be released by the affidavit together with assets described in (d)2 above, provided that the Class "A" transferee's letters testamentary or of administration are attached and made a part of the affidavit as provided in (d)1 above. Where the Class "A" transferee has not qualified as an executor or administrator of the decedent's estate, only intangible assets may be released by the affidavit in accordance with (d)2 above.

4. A separate affidavit is required for each institution, organization or corporation releasing assets to a Class "A" transferee.

5. The affidavit of waiver by the Class "A" transferee cannot be used for real property and tangible personal property transfers from a decedent to a Class "A" transferee.

6. Estate tax waivers are required if the decedent died after December 31, 2001 except as provided in (e) below. Estate tax waivers are not required if a decedent died on or prior to December 31, 2001.

(e) An estate tax waiver is not required for decedents dying after December 31, 2001 if the decedent's taxable estate plus adjusted taxable gifts for Federal estate tax purposes under the provisions of the Internal Revenue Code in effect on December 31, 2001 does not exceed $ 675,000.

(f) In the absence of the express approval of the Director, waivers are not issued until the passage of ten business days following the receipt of payment.

18:26-10.13 Interest on refunds

N.J.A.C. 18:26-10.13 (2014)

§ 18:26-10.13 Interest on refunds

   If the Inheritance Tax Branch takes more than six months to remit a valid refund after a refund application or written request is received by the Director, taxpayers have the right to receive interest on the refund. If interest must be paid, it will be calculated to accrue from the date of filing of a refund claim, the date of tax is paid in accordance with N.J.A.C. 18:26-8.6, or the due date of the return, whichever is later. Interest will be paid at a rate determined by the Director to be equal to the prime rate, determined for each month or fraction thereof, compounded annually at the end of each calendar year, from the date that such interest commences to accrue to the date of the refund. This rule becomes effective for returns due on and after January 1, 1994. No interest will be paid on an overpayment of less than one dollar ($ 1.00), or on an overpayment refunded within six months after the last date prescribed or permitted by extension of time for filing the return, or within six months after the return is filed, whichever is later. No interest will be paid on an overpayment unless the taxpayer files a claim for refund.

18:26-10.12 Time and manner of making application for refund

N.J.A.C. 18:26-10.12 (2014)

§ 18:26-10.12 Time and manner of making application for refund

   (a) All applications for a refund are to be made within three years from the date of payment or from the date of any final determination of a court of competent jurisdiction which establishes the fact that the decedent had no legal or equitable interest in the property on which the tax was assessed, whichever is later, but in no event shall a refund be made where such final determination occurs more than 20 years after the date of decedent's death.

(b) Such application is to be made by means of an affidavit on legal size paper, setting forth in detail all of the facts upon which the claim for refund is based, including a copy of a Court Order, if a court of competent jurisdiction has made a final determination upon which the refund is based, signed by the executor, administrator, trustee, heir-at-law, or surviving joint tenant and filed directly with the Transfer Inheritance Tax Branch, PO Box 249, Trenton, New Jersey 08646-0249.

(c) The date of payment is defined as the date the payment is actually received by the Division. It is not the date on which the tax return is filed, the date the Notice of Assessment is issued or the date on which the audit is completed and/or the file closed.

(d) Protective refund claims based on reasonably anticipated events may be filed within the time periods set forth in (a) above.

1. The refund claim must be made on the inheritance and estate tax "Protective Claim for Refund" form. The form must be fully completed and set forth the estimated refund amount and the basis for the claim.

2. The Director must be notified of the actual refund claimed within 90 days after occurrence of the anticipated event.

3. For the purpose of determining the interest, if any, payable on a protective refund claim, the refund claim shall be deemed to have been made on the date that the Director is notified of the occurrence of the anticipated event.

 

18:26-10.11 Refund when debt proved after legacy or distributive share paid

N.J.A.C. 18:26-10.11 (2014)

§ 18:26-10.11 Refund when debt proved after legacy or distributive share paid

   In any case where a debt against the estate of a decedent is proved after a legacy has been paid or property has been distributed from which legacy or property the New Jersey Inheritance Tax has been deducted or paid, the legatee, devisee, heir or next of kin may make an application for a refund to pay such debt to the executor, administrator or trustee, who shall refund a proportion of the tax where the same has not been paid to the Director or who shall make application for a refund to the Director in the manner provided in N.J.A.C. 18:26-10.12 (Time and manner of mailing application for refund) and upon receipt of such refund, repay the legatee, devisee, heir or next of kin the proportion of the tax overpaid.
N.J.A.C. 18:26-10.11 (2014)

§ 18:26-10.11 Refund when debt proved after legacy or distributive share paid

   In any case where a debt against the estate of a decedent is proved after a legacy has been paid or property has been distributed from which legacy or property the New Jersey Inheritance Tax has been deducted or paid, the legatee, devisee, heir or next of kin may make an application for a refund to pay such debt to the executor, administrator or trustee, who shall refund a proportion of the tax where the same has not been paid to the Director or who shall make application for a refund to the Director in the manner provided in N.J.A.C. 18:26-10.12 (Time and manner of mailing application for refund) and upon receipt of such refund, repay the legatee, devisee, heir or next of kin the proportion of the tax overpaid.

18:26-10.10 Overpayment of account

N.J.A.C. 18:26-10.10 (2014)

§ 18:26-10.10 Overpayment of account

   In any case where the amount paid on account for New Jersey inheritance taxes exceeds the amount of such tax due after final assessment has been made, the amount so overpaid shall be refunded by the State Treasurer in the due course of business, provided, however, that all applications for a full or partial refund of the payment of the transfer inheritance tax shall be made within three years from the date of such payment, or from the date of the final determination of a court of competent jurisdiction, which establishes the fact that the decedent had no legal or equitable interest in the property on which the tax was assessed and erroneously paid, whichever is later; and provided, however, that no refund shall be made where such final determination occurs more than 20 years after the date of death of the decedent.

18:26-10.9 Refund for erroneous overpayment

N.J.A.C. 18:26-10.9 (2014)

§ 18:26-10.9 Refund for erroneous overpayment

   In any case where there has been an overpayment in error of the New Jersey Inheritance Tax, an application for a refund may be made in the manner provided in N.J.A.C. 8:26-10.12 (Time and manner of mailing application for refund) to the Director, who upon satisfactory proof of such erroneous payment, may certify such overpayment to the Director of the Division of Budget and Accounting who in turn draws his warrant on the State Treasurer for the amount overpaid in favor of the executor, administrator, person or persons who have paid the tax in error, or who are lawfully entitled to such refund.

18:26-10.7 Proceedings to compel payment of taxes; collection cost fees

N.J.A.C. 18:26-10.7 (2014)

§ 18:26-10.7 Proceedings to compel payment of taxes; collection cost fees

   (a) In the event the New Jersey Transfer Inheritance Tax which has accrued is not paid within the time provided by law, the Director shall notify the Attorney General of this State who shall institute an action to compel the payment of such tax in the name of the Director in the Superior Court of this State and any judgment cited in such action will have the same effect as other judgments entered in the Superior Court so as to constitute a lien which may be executed on any property of a decedent.

(b) In the event the New Jersey inheritance tax is not paid within the time prescribed by law, fees for the cost of collection shall be imposed as follows:

1. If a certificate of debt is issued pursuant to N.J.S.A. 54:49-12, the fee shall be five percent of the tax or $ 100.00, whichever is greater;

2. If the tax remains unpaid after the issuance of the certificate of debt and the matter is referred to the Attorney General, the fee shall be 10 percent of the tax or $ 200.00, whichever is greater; and

3. If a suit is instituted for the collection of the tax, the fee shall be 20 percent of the tax or $ 500.00, whichever is greater.

(c) The fees specified in (b) above shall be paid in addition to any interest or penalty, or both, otherwise provided by law.

 

18:26-10.6 Statement of payment or exemption

N.J.A.C. 18:26-10.6 (2014)

§ 18:26-10.6 Statement of payment or exemption

   When the tax and interest chargeable has been paid in full or secured by bond, or when an estate is determined by the Director to be exempt from any Inheritance Tax of this State, a statement of such fact, signed by the Director and including a description of any real property involved, is issued to the executor, administrator or other representative of the estate who may record such statement in the office of the county clerk of the county wherein the real property if any is situated.

18:26-10.5 Payment of tax collected; receipt

N.J.A.C. 18:26-10.5 (2014)

§ 18:26-10.5 Payment of tax collected; receipt

   Within 30 days from the time an executor, administrator, or trustee has retained or received the amount due for inheritance taxes on the transfer of property, he is required to pay the same to the Director and may, upon written request, receive a receipt signed by the State Treasurer and countersigned by the Director, which represents a voucher in settlement of the account of the executor, administrator, or trustee.

18:26-10.4 Deduction or collection of tax before distribution

N.J.A.C. 18:26-10.4 (2014)

§ 18:26-10.4 Deduction or collection of tax before distribution

   (a) An executor, administrator or trustee having charge or holding in trust any property subject to the New Jersey Inheritance Tax for distribution is to deduct from such property the Inheritance Tax assessed and levied on the transfer prior to distribution to the transferee. In the event the property to be transferred is not money, however, the executor, administrator or trustee is to collect the Inheritance Tax assessed and levied from the person entitled to the property prior to delivering such property to the transferee, and unless such tax is collected, the executor, administrator or trustee may not deliver or be compelled to deliver any property to a transferee.

(b) In the case of a legacy charged upon or payable out of real property, the heir or devisee is to deduct the Inheritance Tax from the legacy and pay such tax over to the executor, administrator or trustee who may enforce the payment of such tax in the same manner as the payment of such legacy may be enforced.

(c) In the case of a legacy given to a person in money for a limited period, the executor, administrator or trustee is to retain the Inheritance Tax due for the entire amount of money transferred; however, if such legacy is charged upon or payable out of property, other than money, the executor, administrator or trustee, may, if he believes the same to be necessary, apply to the court having jurisdiction of his accounts to make an apportionment of the sum to be paid him by the legatee for the tax.

(d) An executor, administrator or trustee may, if necessary, sell so much of the property of a decedent as is necessary to pay the New Jersey Inheritance Tax due on the transfer of such property.

18:26-10.2 Lien of tax; duration

N.J.A.C. 18:26-10.2 (2014)

§ 18:26-10.2 Lien of tax; duration

   (a) The New Jersey Inheritance Tax whether or not assessed or levied constitutes a lien on all the property owned by the decedent as of the date of death for a period of 15 years unless sooner paid or secured by a bond.

(b) After a period of 15 years from the date of a decedent's death has expired no proceeding may be instituted to assess and collect the New Jersey Inheritance Tax or any interest or penalties due thereon. No notice or consent to transfer is required for the transfer of any real or personal property and no personal liability remains on any executor, administrator, trustee, grantee, donee, vendee, devisee, legatee, heir, next of kin or beneficiary; however, this does not affect any right of the State under any certificate of debt, decree or judgment for taxes, interest and penalties duly recorded with the clerk of the Superior Court, or with any county clerk, or to assess and enforce the collection of any tax including any interest and penalties pursuant to the terms of any bond or other agreement securing the payment of the tax, interest and penalties.

18:26-10.1 Levy of tax; resident and nonresident decedents

N.J.A.C. 18:26-10.1 (2014)

§ 18:26-10.1 Levy of tax; resident and nonresident decedents

   Resident and nonresident decedents' returns must be filed together with a certified or cashier's check in full payment of the tax and interest, if any, directly with the Inheritance Tax Branch, PO Box 249, Trenton, New Jersey 08646-0249. Upon filing of a return and payment of the tax, the Branch will issue a notice of assessment showing the amount of tax due, the amount paid, and whether interest is due or a refund is to be issued (see N.J.A.C. 18:26-8.6, 9.4, 9.9 and 9.10).

18:26-9.16 Composition of taxes, bond

N.J.A.C. 18:26-9.16 (2014)

§ 18:26-9.16 Composition of taxes, bond

   (a) Where an estate is so created that the remainders or expectant estates are of such a nature or are so disposed or circumstanced that the taxes thereon are held not to be presently payable, or where the interests of legatees or devisees are not ascertainable at the death of the testator, grantor, donor or vendor, the Director may enter into an agreement with the executors or trustees of such estate for the purpose of compounding the tax due upon such terms as are deemed equitable and expedient.

(b) The payment of the tax due pursuant to a composition or compromise are conclusive in favor of the executor or trustee as against any cestui que trust and who possess a present right of enjoyment, interest in, or fixed, absolute or indefeasible right of future enjoyment in property and any cestui que trustents as would possess such rights in the event a particular estate would terminate.

(c) If the executor or trustee elects to defer the adjustment of the taxes due until the person or body politic or corporate beneficially interested in the property chargeable with the tax comes into actual possession or enjoyment of the property, such executor or trustee must execute a bond to the State of New Jersey in twice the amount of the tax imposed at the highest possible rate, with such surety or sureties as approved by the New Jersey Department of Banking and Insurance or by the Director, conditioned to pay the tax and interest at the time or period when such contingency occurs.

18:26-9.15 Bond for failure to pay tax

18:26-9.15 Bond for failure to pay tax

   (a) Where an executor, administrator, grantee, donee, vendee, or trustee fails to pay the tax due within eight months from the date of a decedent's death, such person is required to give a bond, on a form approved by the Director, to the State of New Jersey, in double the amount of the tax to secure payment of any tax and interest which may become due.

(b) In the case of tax due on any sum recovered as compensation for the death of a person caused by a wrongful act, neglect, or default, the bond shall be required within eight months of the due date (the date of the award or settlement) if the tax is not paid within 30 days of the receipt of the award or settlement.

18:26-9.14 Payment on executory devise or transfer subject to a contingency or power of appointment

N.J.A.C. 18:26-9.14 (2014)

§ 18:26-9.14 Payment on executory devise or transfer subject to a contingency or power of appointment

   (a) With respect to the payment of the tax due on an executory devise, or a transfer subject to a contingency or power of appointment, any payment on such a transfer after the expiration of two months from the date the contingency occurs or the property vests, shall bear interest at the rate of 10 percent per annum from the expiration of the two-month period, until the date of actual payment.

(b) In any case where a contingent remainder vests in beneficial possession and enjoyment subsequent to the death of the original decedent, but prior to the expiration of the statutory interest period, interest on the contingent tax does not start to accrue until eight months from the date of death of the original decedent.

18:26-9.13 Late payment; general provisions

N.J.A.C. 18:26-9.13 (2014)

§ 18:26-9.13 Late payment; general provisions

   (a) Any payment of the New Jersey inheritance tax after the expiration of the corresponding day of the eighth month following the date on which it became due and payable shall bear interest at the rate of 10 percent per annum on any unpaid portion of the tax, from the expiration of eight months after the date on which it became due and payable until the date of actual payment, unless payment was tendered by the taxpayer within the eight month period and is evidenced by the postmark of the United States Postal Service on the letter conveying the payment, by a postmark made by other than the United States Postal Service (that is, metered mail) within the eight month period and the payment was received by the Inheritance Tax Branch within three days of the expiration of the eight month period, or by other acceptable proof, but was not credited through no fault of the taxpayer, in which case no interest shall be charged, or unless by reason of any claims made upon the estate, necessary court litigation, or other unavoidable cause of delay, the decedent's estate or a part thereof, cannot be settled before the expiration of eight months from the date of death, in which event interest at the rate of only six percent per annum is to be charged from the expiration of eight months until the cause of delay is removed.

(b) In cases where there is no corresponding day in the eighth calendar month following the date of death, the first business day of the succeeding month shall be the effective date for purposes of determining interest penalties; for example where decedent died June 30, 1962, the tax payment will not bear interest if made on or before March 1, 1963.

(c) In cases where a decedent dies while a member of the Armed Forces of the United States, the tax due shall begin to bear interest at the rate of 10 percent per annum on any unpaid balance due after the expiration of eight months after receipt of official notification of the death of the decedent by the spouse/civil union partner, parent or next of kin of such decedent.

(d) Any person liable for the payment of the tax, may, in order to avoid a penalty, estimate and pay the tax believed to be owing prior to actual receipt of a tax bill. In the event of any over-payment of the tax, a refund will be made. In the event of an underpayment, interest will be charged on the balance due.

(e) Tax on any sum recovered as compensation for the death of a person caused by a wrongful act, neglect, or default must be paid within 30 days of the receipt of the award or settlement. Tax not paid within 30 days shall bear interest at the rate of 10 percent per annum from the expiration of eight months after the due date (the date of the award settlement) to the date of actual payment subject to the exceptions in (a) above.

(f) For returns due on or after July 1, 1993 the Director shall waive the payment of any part of any penalty or interest attributable to the executor's, administrator's, or trustee's reasonable reliance on erroneous advice furnished to the taxpayer in writing on or after July 1, 1993 by an employee of the Transfer Inheritance and Estate Tax Branch acting in the employee's official capacity, provided that the penalty or interest did not result from the failure of the executor, administrator or trustee to provide adequate or accurate information. The executor, administrator, or trustee has the affirmative obligation to show that it was reasonable to rely on the written advice.

§ 18:26-9.12 Liability for nonpayment

N.J.A.C. 18:26-9.12 (2014)

§ 18:26-9.12 Liability for nonpayment

   The tax on a gift in contemplation of death, or to take effect in possession or enjoyment at or after death, if not paid by the donee must be paid by executor or administrator to the extent of the assets within such fiduciary's possession or control.

18:26-9.11 Persons responsible

18:26-9.11 Persons responsible

   Any administrator, executor, trustee to the extent of any estate funds in his possession, grantee, donee, cestui que trustent, beneficiary and vendee is personally liable for any and all New Jersey Inheritance Taxes until paid or provided for by bond in double the amount of the tax due to the extent of his or her interest in the estate and an action at law may be brought in the name of the State against any such person for payment of such tax. See N.J.A.C. 18:26-10.4 (Deduction or collection of tax before distribution).

18:26-9.10 How tax is payable

18:26-9.10 How tax is payable

   (a) A certified or cashiers check in full payment of the tax and interest, if any, must be filed together with the return directly with the Inheritance Tax Branch, PO Box 249, Trenton, New Jersey 08646-0249.

(b) Where interest has accrued at the time of any payment, such payment is first credited in satisfaction of the accrued interest, and the excess credited in payment of the tax chargeable. The interest shall continue to accrue on any remaining balance from the date of said payment to the date of final adjustment.

(c) Payment on account of any transfer inheritance tax to be assessed may be made in advance of the actual assessment. Any payment on account will also be accepted to cover any compounded, contingent or compromise assessment.

18:26-9.9 Payment

18:26-9.9 Payment

   (a) Due date of payment. The New Jersey Inheritance Tax is due at the date of a decedent's death; however, payment may be made at any time within eight months after the date of death. There is no extension of time permitted or granted for the payment of the tax.

(b) Due date, executory devises, contingent future estates, estates subject to power of appointment. The New Jersey Inheritance Tax on executory devise or the transfer of property subject to a contingency or a power of appointment is due and payable within two months after the person entitled to the property comes into enjoyment, seisin or possession of such property.

18:26-9.6 Amendment to original return

18:26-9.6 Amendment to original return

   In the case of both resident and nonresident estates, any assets and liabilities not disclosed in the original return and all supplemental data requested by the Branch is to be filed in affidavit form on legal size paper and attested to by the duly authorized statutory representative of the estate, next of kin, or beneficiary certifying in detail a description of the asset, real or personal and/or the liability and the reasons for failure to disclose same in the original return and filed directly with the Transfer Inheritance Tax Branch, PO Box 249, Trenton, New Jersey 08646-0249.

 

18:26-9.5 Nonresident returns

18:26-9.5 Nonresident returns

   (a) In the case of a nonresident decedent, a return must be filed and tax computed on Form IT-NR (Non-Resident) or, where the representative or beneficiary of such estate agrees to the use of a flat tax rate a flat tax rate affidavit, either of which must be accompanied by payment of tax, and a certified copy of the decedent's will, if such decedent dies testate.

(b) A flat tax may be paid in lieu of filing the information required in Form IT-NR, if the representative or beneficiary of a nonresident estate files an affidavit containing the following information:

1. The name of the decedent; date of death and legal domicile as of the date of death;

2. A description and fair market value if the New Jersey goods, wares and merchandise, describing (by lot and block number and deed reference) the New Jersey real estate and giving the assessed and market values thereof for the year of decedent's death and explaining how any fractional ownership in real estate was derived if the decedent owned a fractional interest, as well as any liens or encumbrances outstanding at decedent's death;

3. A statement as to the value of gross estate of decedent both in and outside of New Jersey, certifying whether the decedent made any gifts or transfers in contemplation of death, or to take effect at or after death, or created any trust in his lifetime and giving the names and relationship to decedent of donees or transferees, and market value of gifts, transfers or trusts;

4. Where the decedent died testate, attach a certified copy of the will and give the ages as of the date of death of decedent of any life tenants or annuitants and stating whether all beneficiaries survived. In those cases where decedent died intestate, state the names of the heirs-at-law and the next-of-kin and their relationship to decedent, giving the parentage of any heirs and next-of-kin taking a deceased parent's share;

5. A recital to the effect that all right is waived for a refund of the payment of tax and interest found due.

(c) On the basis of the above data the flat tax will usually approximate the tax payable as if the detailed report were filed. Statutory rates and exemptions will be used in the flat rate computation.

 

18:26-9.4 Resident decedents' returns

18:26-9.4 Resident decedents' returns

   (a) In the case of a resident decedent, all returns must be filed and tax computed on one of the following forms and accompanied by payment of tax, a copy of the decedent's will, if such decedent died testate, as well as a copy of the decedent's income tax return (form 1040 or 1040A) filed with the Internal Revenue Service for the last full year preceding his or her date of death:

1. Form IT-R (Resident): Must be used in all resident estates.

2. Form L-4: Preliminary affidavit to be used in making application for consents to transfer prior to completion of the original return. The Branch will retain in every case control over a sufficient portion of the assets to assure collection of the tax, even though a payment on account may have been made. The Branch will not issue consents to transfer all the personal property and depends upon real property as security for the tax. The only exception to the procedure is where a bank, trust company, or similar institution has been named executor and guarantees in writing, payment of tax.

3. Form L-8: Self-executing waiver for use in permitting a transfer of assets to a Class "A" beneficiary.

4. Form L-9: Application by the representative of the estate of a resident decedent for issuance of a waiver permitting a transfer of real estate to a Class "A" beneficiary.

5. Form L-10: Affidavit and self-executing waiver of County Welfare Director.

18:26-9.3 Form of returns

 18:26-9.3 Form of returns

   Returns are required to be made on forms IT-R (Resident) and IT-NR (Non-Resident) approved by the Director which may be obtained by writing to the Transfer Inheritance Tax Branch, PO Box 249, Trenton, New Jersey 08646-0249.

18:26-9.2 By whom filed

18:26-9.2 By whom filed

   (a) A return may be prepared, executed and filed by:

1. The personal representative of the estate; or,

2. Any beneficiary entitled to share in the estate where letters testamentary or of general administration are not applied for or not required; or,

3. A surviving joint tenant where the decedent dies intestate and his or her entire estate passes to a surviving joint tenant by operation of law; or,

4. The director of any county welfare board in cases where no executor or administrator has been appointed and an heir-at-law or next-of-kin is not available, or is unwilling to execute such returns, provided that such return is accompanied by a copy of the report of the board upon which the decision to grant assistance was based, and a copy of any document signed by the applicant (decedent) for assistance.

   (a) A return may be prepared, executed and filed by:

1. The personal representative of the estate; or,

2. Any beneficiary entitled to share in the estate where letters testamentary or of general administration are not applied for or not required; or,

3. A surviving joint tenant where the decedent dies intestate and his or her entire estate passes to a surviving joint tenant by operation of law; or,

4. The director of any county welfare board in cases where no executor or administrator has been appointed and an heir-at-law or next-of-kin is not available, or is unwilling to execute such returns, provided that such return is accompanied by a copy of the report of the board upon which the decision to grant assistance was based, and a copy of any document signed by the applicant (decedent) for assistance.

   (a) A return may be prepared, executed and filed by:

1. The personal representative of the estate; or,

2. Any beneficiary entitled to share in the estate where letters testamentary or of general administration are not applied for or not required; or,

3. A surviving joint tenant where the decedent dies intestate and his or her entire estate passes to a surviving joint tenant by operation of law; or,

4. The director of any county welfare board in cases where no executor or administrator has been appointed and an heir-at-law or next-of-kin is not available, or is unwilling to execute such returns, provided that such return is accompanied by a copy of the report of the board upon which the decision to grant assistance was based, and a copy of any document signed by the applicant (decedent) for assistance.

18:26-9.1 Date return due

18:26-9.1 Date return due

   (a) All inheritance tax returns must be filed, together with payment of the tax, within eight months following the death of the decedent. Failure of the personal representative, heir-at-law or next-of-kin, surviving joint tenant, trustee or transferee to file a return within the time prescribed subjects such party responsible for such filing to the penalties provided in N.J.S.A. 54:35-3.

(b) The Director may grant an extension in which the report may be filed. An estate representative may request an extension of time to file the New Jersey transfer inheritance tax return by filing Form IT-EXT (Application for Extension of Time to File a Return). An extension may be requested for a period of four months beyond the original due date. If it is not possible to file the return within the four month extension period, the estate representative may request an additional two month extension, or a total of six months. Extension beyond six months from the original due date of the return will be granted only in cases where the Director determines that exceptional circumstances exist.

1. This subsection provides the authority only for an extension of time to file the transfer inheritance tax return, and does not extend the time to pay the tax. The tax liability is due on the decedent's date of death and must be paid in full within eight months.

 

18:26-8.25 Certificates of deposit, savings certificates and special savings accounts

18:26-8.25 Certificates of deposit, savings certificates and special savings accounts

   Certificates of deposit, savings certificates, special savings accounts and other accounts with banking institutions which provide for a penalty for premature withdrawal are to be reported at face value at the death of the decedent, plus interest which may have been credited up to the date of death, unless it is necessary to redeem any or all of the items so described in order to pay the debts of the estate, to carry out the provisions of the will, to effect distribution of the estate under the intestate law or for the payment of taxes. In those cases, the actual amount received on redemption is reportable for taxation.

18:26-8.24 Estates subject to power of appointment

18:26-8.24 Estates subject to power of appointment

   When an instrument creates a power of appointment, the life estate or estate for years, to which such power is subject, is immediately appraised and taxed according to the provisions of N.J.A.C. 18:26-8.22; however, the appraisal and taxation of the remainder interest is suspended until the exercise of the power, at which time it is taxed at the clear market value as of date of death of the death of the creator of the power.

18:26-8.23 Vested remainders after estate for life, estate for a term of years, or annuity

18:26-8.23 Vested remainders after estate for life, estate for a term of years, or annuity

   When a vested remainder interest in any property subject to the New Jersey Inheritance Tax is bequeathed, devised, conveyed, granted, sold or given subject to one or more life estates, estates for a term of years, or annuities, such vested remainder is valued by first ascertaining the clear market value of the whole property and then deducting therefrom the value of each such life estate, estate for a term of years, or annuity as determined in accordance with the provisions of N.J.A.C. 18:26-8.22 (Estates for life, estates for a term of years and annuities).

18:26-8.22 Estates for life, estates for a term of years and annuities

18:26-8.22 Estates for life, estates for a term of years and annuities

   Life estates, estates for a term of years and annuities are valued using an interest rate assumption of six percent and the mortality data for persons of the relevant gender set forth in the tables of mortality contained in the United States Decennial Life Tables (Life Table for Males: United States and Life Table for Females: United States) most recently published by the United States Department of Health and Human Services as of the date of the decedent's death. This valuation methodology applies even in cases in which a holder of a life estate, estate for a term of years, or annuity survives the decedent by only a short period.

Durable Power of Attorney

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Post Will Signing for Attorney to do

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