Iowa Administrative Code › Agency 701 - Revenue Department › Title I - Administration › Chapter 86 - Inheritance Tax › Rule 701-86.1 - Administration

Current through Register Vol. 47, No. 3, July 24, 2024
(1) Definitions.
				The following definitions cover Chapter 86.
"Administrator"
means the administrator of
				  the compliance division of the department of revenue.
"Child"
means a biological or adopted issue
				  entitled to inherit pursuant to Iowa Code chapter 633.
"Compliance division" is the administrative unit of the
				  department created by the director to administer the inheritance, estate,
				  generation skipping transfer , and fiduciary income tax laws of the
				  state.
"Department" means the department of revenue.
"Devise," when used as a verb, means to dispose of property
				  , both real and personal, by a will.
"Dir ector" means the director of revenue.
"Estate"
means the real and personal
				  property , tangible and intangible, of the decedent or a trust, that over time
				  may change in form due to sale, reinvestment, or otherwise, and augmented by
				  accretions or additions thereto and substitutions therefor , or diminished by
				  any decreases and distributions therefrom. For the definitions of "gross
				  estate" and "net estate" under this chapter , see those terms as referenced in
				  this subrule.
"Executor"
means any person appointed by the
				  court to administer the estate of a testate decedent.
"Fiduciary"
includes personal
				  representative, executor , administrator , and trustee. This term includes both
				  temporary and permanent fiduciaries appointed by the court to settle the
				  decedent' s probate estate and also the trustee of an inter vivos trust where
				  the trust assets are part of the gross estate for inheritance tax purposes.
"Gross estate"
as used for inheritance tax
				  purposes as defined in Iowa Code section 450.2 includes all those items, or
				  interests in property , passing by any method of transfer specified in Iowa
				  Code section
				  4503. without
				  reduction for liabilities specified in Iowa Code section 450.12. The gross
				  estate for tax purposes may not be the same as the estate for probate purposes.
				  For example, property owned as joint tenants with right of survivorship,
				  property transferred with a retained life use, gifts in excess of the annual
				  gift tax exclusion set forth in Internal Revenue Code Section 2503(b) and
				  within three years of death, transfers to take effect in possession or
				  enjoyment at death, trust property , "pay on death" accounts, annuities, and
				  certain retirement plans, are not part of the decedent' s probate estate, but
				  are includable in the decedent' s gross estate for inheritance tax purposes. In
				  r e Louden' s Estate, 249 Iowa 1393, 92 N.W .2d 409 (1958); In r e Sayr es'
				  Estate, 245 Iowa 132, 60 N.W .2d 120 (1953); In r e Toy' s Estate, 220 Iowa
				  825, 263 N.W . 501 (1935); In r e Mann' s Estate, 219 Iowa 597, 258 N.W . 904
				  (1935); Matter of Bliven' s Estate, 236 N.W .2d 366 (Iowa 1975); In r e
				  English' s Estate, 206 N.W .2d 305 (Iowa 1973).
Effective for estates of a decedent dying on or after July 1,
				  2003, property and any interest in or income from any of the estates and
				  property , which pass from the decedent owner in any manner , are subject to
				  tax if the passing interest is in one of the following:
(1) real estate and tangible personal property located in
				  Iowa regardless of whether the decedent was a resident of Iowa at death; and
(2) intangible personal property owned by a decedent
				  domiciled in Iowa.
"Gross share" means the total amount of property of an heir ,
				  beneficiary , surviving joint tenant, or transferee, without reduction of those
				  items properly deductible in computing the net shares. The total of all gross
				  shares is equal to the gross estate.
"Heir"
includes any person, except the
				  surviving spouse, who is entitled to property of the decedent under the
				  statutes of intestate succession.
"Internal Revenue Code"
means the Internal
				  Revenue Code of 1954 as defined in Iowa Code section 422.3(5) and is to include
				  the revisions to the Internal Revenue Code made in 1986 and all subsequent
				  revisions.
"Intestate estate"
means an estate in which
				  the decedent did not have a will. Administration of such estates is governed by
				  Iowa Code sections
				  633227.
				  through 633.230. Rules of inheritance for such estates are found in Iowa Code
				  sections 633.211 through 633.226.
"Issue,"
for the purpose of intestate
				  succession, means all lawful lineal descendants of a person, whether biological
				  or adopted. For details regarding intestate succession, see Iowa Code sections
				  633.210 through 633.226. For details regarding partial intestate succession,
				  see Iowa Code section 633.272.
"Net estate"
means the gross estate less
				  those items specified in Iowa Code section 450.12 as deductions in determining
				  the net shares of property of each heir , beneficiary , surviving joint tenant,
				  or transferee. In r e Estate of W addington, 201 N.W .2d 77 (Iowa 1972). The
				  total of all net shares of an estate must equal the total of the net
				  estate.
"Net share" means the gross share less the liabilities, if
				  any , which are properly deductible from the gross share of an heir ,
				  beneficiary , surviving joint tenant, or transferee. The law of abatement of
				  shares may be applicable for purposes of determining the net share subject to
				  tax. See Iowa Code section
				  633436.;
				  In r e Estate of Noe, 195 N.W .2d 361 (Iowa 1972); Colthurst v . Colthurst, 265
				  N.W .2d 590 (Iowa 1978); In r e Estate of Duhme, 267 N.W .2d 688 (Iowa 1978).
				  However , see Iowa Code section
				  633278.
				  for property subject to a mortgage.
"Personal representative"
shall have the
				  same meaning as the term is defined in Iowa Code section 633.3(29) and shall
				  also include trustees. For information regarding claims of a personal
				  representative, see Iowa Code section 633.431.
"Probate"
means the administration of an
				  estate in which the decedent either had or did not have a will. Jurisdiction
				  over the administration of such estates, among other matters, is by the
				  district court sitting in probate. For further details on the subject matter
				  and personal jurisdiction of the district court sitting in probate, see Iowa
				  Code sections
				  63310. through
				  633.21. For matters regarding the procedure in probate, see Iowa Code sections
				  633.33 through 633.53.
"Responsible party"
is the person liable for
				  the payment of tax under this chapter . See 701-86.2(450).
"Simultaneous deaths"
occur when the death
				  of two or more persons occurs at the same time or there is not sufficient
				  evidence that the persons have died otherwise than simultaneously . For
				  distribution of property in this situation, see Iowa Code sections 633.523
				  through 633.528.
"Stepchild" means the child of a person who was married to
				  the decedent at the time of the decedent' s death, or the child of a person to
				  whom the decedent was married, which person died during the marriage of the
				  decedent.
"Surviving spouse"
means the legally
				  recognized surviving wife or husband of the decedent.
"Tax"
means the inheritance tax imposed by
				  Iowa Code chapter 450.
"Taxpayer"
means a person liable for the
				  payment of the inheritance tax under Iowa Code section 450.5 and includes the
				  executor or personal representative of an estate, the trustee or other
				  fiduciary of property subject to inheritance tax, and includes each heir ,
				  beneficiary , surviving joint tenant, transferee, or other person becoming
				  beneficially entitled to any property or interest therein by any method of
				  transfer specified in Iowa Code section 450.3, as subject to inheritance tax
				  with respect to any inheritance tax due on the respective shares of the
				  property .
"Trustee"
means the person or persons
				  appointed as trustee by the instrument creating the trust or the person or
				  persons appointed by the court to administer the trust.
"Trusts"
means real or personal property
				  that is legally held by a person or entity for the benefit of another . This
				  includes, but may not be limited to, express trusts, trusts imposed by court
				  order , trusts administered by the court, and testamentary trusts. Such trusts
				  are subject to Iowa Code chapter 450, even in situations when the estate
				  consists solely of trust property .
"Unknown heirs"
means heirs to an estate in
				  which the identities of the heirs or the place of residency of the heirs cannot
				  be ascertained with reasonable certainty .
"Will"
includes codicil; it also includes a
				  testamentary instrument that merely appoints an executor , and a testamentary
				  instrument that merely revokes or revives another will. For information
				  regarding mutual and contractual wills, see Iowa Code section 633.270.
(2)
Delegation of
				authority
. The director delegates to the administrator , subject
				always to the supervision and review by the director , the authority to
				administer the Iowa inheritance tax. This delegated authority specifically
				includes, but is not limited to, the determination of the correct inheritance
				tax liability; making assessments against the taxpayer for additional
				inheritance tax due; authorizing refunds of excessive inheritance tax paid;
				issuing receipts for inheritance tax paid; executing releases of the
				inheritance tax lien; granting extension of time to file the inheritance tax
				return and pay the tax due; granting deferments to pay the inheritance tax on a
				property interest to take effect in possession or enjoyment at a future date;
				requesting or waiving the appraisal of property subject to the inheritance tax
				and the imposition of penalties for failure to timely file or pay the
				inheritance tax. The administrator may delegate the examination and audit of
				inheritance tax returns to the supervisors, examiners, agents, and any other
				employees or representatives of the department.
(3)
Information deemed
				confidential
. Federal tax returns, federal return information,
				inheritance tax returns, and the books, records, documents, and accounts of any
				person, firm, or corporation, including stock transfer books, requested to be
				submitted to the department for the enforcement of the inheritance tax law ,
				shall be deemed and held confidential by the department, subject to public
				disclosure only as provided by law . See 26 U.S.C. Section 6103 pertaining to
				confidentiality and disclosure of federal tax returns and federal return
				information.
(4)
Information not confidential
. Copies of wills, the filing of
				an inheritance tax lien, release of a real estate lien, probate inventories,
				trust instruments, deeds and other documents which have been filed for public
				record are not deemed confidential by the department.
(5)
Forms
. The final
				inheritance tax return, inheritance tax receipts, and forms for the audit,
				assessment, and refund of the inheritance tax shall be in such form as may be
				prescribed or approved by the director-see
				701-83.
				(17A).
(6)
Safe deposit
				boxes and joint accounts
. Effective July 1, 1998, there is no longer a
				requirement for safe deposit boxes to be inventoried and reported to the
				department prior to the delivery of the assets to the personal representative,
				transferee, joint owner , or beneficiary . Additionally , effective July 1,
				2005, there is no longer a requirement that all persons, banks, credit unions,
				and savings and loan associations notify the department of the balance in a
				joint account on the date of a deceased joint owner ' s death and the name and
				address of the surviving joint owner prior to permitting the withdrawal of
				funds from the joint account by a surviving joint owner .
This rule is intended to implement Iowa Code chapter 22 and
				  Iowa Code sections
				  4501.
				  and 450.2 as amended by 2003 Iowa Acts, chapter 95, sections 1 and 2, and
				  sections 421.2, 450.67, 450.68, 450.94, 450.97 and 450B.7