New Jersey Administrative Code › Title 18 - TREASURY - TAXATION › Chapter 26 - TRANSFER INHERITANCE AND ESTATE TAX › Subchapter 3B - ESTATE TAX-DECEDENTS DYING AFTER DECEMBER 31, 2016, BUT BEFORE JANUARY 1, 2018 › Section 18:26-3B.2 - Amount of the tax and certain valuations

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The
				tax is calculated at the rate prescribed by
				N.J.S.A.
				54:38-1.a(3).
(b) The following principles are applicable in
				making valuations and calculating the tax where family limited partnerships are
				involved:
1. A family limited partnership is a
				limited partnership where more than 50 percent of the partners are related by blood
				or marriage/civil union/domestic partnership and does not have a true business
				purpose. It may or may not hold an interest in another partnership or other asset
				that has a true business purpose. One indication of a true business purpose is that
				the family limited partnership has and engages in business or commercial
				transactions with customers, clients, persons, or entities other than the partners
				of the family limited partnership, their family members, or other related
				individuals or entities.
2. In an estate
				where a Federal estate tax return is required to be filed and where the discounts
				for an interest in a family limited partnership claimed have a Federal estate tax
				consequence, the discounts, if any, permitted by the Internal Revenue Service will
				generally be permitted for New Jersey estate tax purposes unless deemed by the
				Director to be excessive.
3. In an
				estate where a Federal estate tax return is not required to be filed and where the
				tax is computed in accordance with the provisions of (a)1 above (maximum credit) and
				in an estate where a Federal estate tax return is required to be filed but where the
				discount claimed for an interest in a family limited partnership has no Federal
				estate tax consequence:
i. If an interest in a
				family limited partnership was created or funded within one year of a decedent's
				death, it is presumed that the value of the interest is the value of the underlying
				assets on the date of death of the decedent unless conclusive proof to the contrary
				is submitted that clearly indicates a different value. Discounts are not permitted
				unless the Director determines that they are warranted by the interest in the
				partnership and/or the nature of and risk associated with the underlying assets.
				Discounts totaling more than 10 percent are not permitted unless the Director
				determines that a greater total discount is warranted by the nature and risk
				associated with the underlying assets.
ii. If an interest in a family limited partnership
				was created or funded more than one year prior to a decedent's death, the interest
				is valued based upon the interest in the partnership and the value of the underlying
				assets on the date of death of the decedent. Discounts totaling more than 10 percent
				are not permitted unless the Director determines that a greater total discount is
				warranted by the nature and risk associated with the underlying assets.