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It would additionally cut back the state property tax on estates valued at greater than $2 million by nearly $100,000, in keeping with attorneys Sara Wells, Laura Lerner and Matthew Tudino.
In contrast to the federal property tax exemption, the Massachusetts exemption “is just not listed for inflation and isn’t transportable between spouses — that’s, for married {couples}, the primary partner to die should use the Massachusetts property tax exemption by passing belongings price $2 million to people aside from the decedent’s partner or to sure kinds of trusts for the advantage of the decedent’s partner or different people, or that partner’s exemption will probably be misplaced,” the Morgan Lewis attorneys state.
Additional, “the worth of actual property and tangible private property situated exterior of Massachusetts will probably be includible in a Massachusetts resident’s gross property below the brand new legislation,” in keeping with the attorneys.
“Nevertheless, the quantity of any property tax because of Massachusetts will probably be lowered in proportion to the worth that the non-Massachusetts situs belongings bear to the full gross property,” they wrote.
As an illustration, “if the property tax due on a Massachusetts resident’s gross property (together with non-Massachusetts situs belongings) is $100,000 and the non-Massachusetts situs belongings make up 20% of the gross property, the property tax due will probably be lowered by 20% to $80,0000,” the attorneys relayed.
Because the legislation was enacted on Oct. 4, the Massachusetts Division of Income “has not but launched revised property tax kinds and directions,” the lawyer state. “If an property tax return for a person who died this 12 months has already been filed, a refund request must be filed primarily based on the brand new $2 million exemption.”
For property tax returns which are due within the coming weeks and months, “it could be prudent to file an extension whereas the Division of Income works on issuing revised kinds,” the Morgan Lewis attorneys mentioned.
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