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Maine Revenue Services has recently discovered that certain instructions for Form 706ME are incomplete and should be updated to be more accurate. The instructions in question pertain to both resident and nonresident estate returns that include Maine elective property and affect the amounts to be included on lines 1 and 2, gross property taxable to Maine and federal gross estate.
Maine law allows for the estate of a decedent (first decedent) with a surviving spouse (the (future) second decedent) to delay Maine estate tax on the difference between the federal and Maine exclusion amounts, currently equal to $1 million. The tax delay is implemented through an election of a Maine qualified terminable interest property (“QTIP”) on the first decedent's estate tax return. For the second decedent, the value of the Maine QTIP (now referred to as “Maine elective property”) must be included in the value of the estate taxable to Maine. The instructions for Form 706ME, lines 1 and 2 did not specify that these amounts were to be included. Elective property must be included in these lines to correctly calculate the ratio of Maine taxable property and, ultimately, Maine tax liability. These instructions have been updated to reflect that both lines must include Maine elective property. The 2006 form, with updated instructions, may be found online at www.maine.gov/revenue/forms.
The 2007 form has been updated to include a separate worksheet that will be required for estates containing Maine elective property. The 2007 form and new worksheet have also been posted to the MRS web site at www.maine.gov/forms. The 2007 Form 706ME will soon be available in printed form; the worksheet, however, is only available through downloading.
CORPORATE TAX BOOKLET MAILING
In previous years, Maine Revenue Services has mailed approximately 15,000 corporate income tax booklets to corporations who filed returns for the prior tax year. However, research indicates that the vast majority of corporations do not use these returns. Instead, they file returns prepared by tax preparation programs. In order to eliminate waste and control processing costs, corporate booklets will no longer be routinely mailed to corporate filers. The booklets are available for download from the Maine Revenue Service web site. Corporations who would like to have a copy of the booklet mailed to them may order one using the forms line at 207-624-7894.
TAX PRACTITIONER INSTITUTES
The 2007 Tax Practitioner Institute, hosted by the Service Corps of Retired Executives Association (SCORE), will be held at three locations in Maine on October 30 (Bangor), November 1 (Portland), and November 14 (Augusta).
Federal and state tax specialists will present workshops designed for those interested in keeping abreast of federal and state tax laws and regulations. The Institute provides 8 hours (including one hour of ethics) of CPE credits.
Seating will be limited and registrations will be accepted by mail only. For more information on Institute programs and locations and for registration forms, contact SCORE at (207) 622-8509 or visit the ScoreMaine.org web site at www.scoremaine.org/.
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