Minnesota Tax Update: MN DOR Conference Call Recap

Yesterday, the MN Department of Revenue held a conference call to provide their initial public guidance with respect to the new estate and gift legislation set to take effect on July 1, 2013. Specifically, the DOR indicated that:

• For purposes of determining a decedent’s MN estate tax filing requirement, he/she must add back any federal adjusted taxable gifts made within three years of the decedent’s death to the federal gross estate.

• For purposes of calculating the MN estate tax, only gifts made after June 30, 2013 will be used.

• There remains ambiguity with respect to whether gifts made to IRC Section 529 educational savings plans (either as a one-time gift or a gift with the federal election to treat it as made ratably over five years) will qualify for the annual exclusion. The Minnesota DOR indicated on the call that they are reviewing the issue in greater detail, but did not provide a timeline regarding further guidance on this issue.

• Another area that is still in question is whether a same-sex couple married under Minnesota’s new law will receive a gift tax marital deduction. Minnesota’s definition of “taxable gifts” references the federal definition in IRC Section 2523, which does not currently recognize a marital deduction for a same-sex married couple. A U.S. Supreme Court decision is anticipated later this year on this issue and the DOR indicated that they will withhold additional guidance until that case is resolved.

For additional information, The MN DOR has updated their webpage with facts sheets on these topics. They can be accessed at:

http://www.revenue.state.mn.us/Pages/law_changes.aspx.

White Oaks Wealth Advisors will continue monitoring the situation and communicate any updates we receive. Please contact us if you have any questions or concerns.

This article contains general information only and White Oaks Wealth Advisors is not, by means of this document, rendering tax or legal advice. This document is not a substitute for professional services or advice, nor should it be used as a basis for any decision or action that may impact you or your business. Before making such decisions, you should consult a qualified professional advisor. White Oaks Wealth Advisors shall not be responsible for any loss sustained by any person who relies on this document.

About Nick Chimerakis

Nick Chimerakis, Senior Planning & Tax Advisor, CPA, CGMA, CFP®

Nick Chimerakis joined White Oaks Wealth Advisors in July 2012. He provides comprehensive wealth, tax, and estate planning to the firm’s clients and oversees the family office accounting functions.

Nick graduated from the University of Notre Dame in 2005 and played three...

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