As I have previously discussed, effective June 30, 2013, the new Minnesota gift tax will impose a 10% tax on certain gifts made by Minnesota residents and those owning property in Minnesota.There are several retroactive implications of the new law.Any decedent who passed after December 31, 2012 will be subject to thefollowing changes under this new tax. The new law indicates that any taxablegifts made three years before the decedents death must be taxed. Additionally, thenew law will affect people who are not from Minnesotta who have an interest ina “pass through entity” with any tangible assets. Now, for estate tax purposes, non-residents mustinclude their gross estate even if the tangible property is held in ans-corporation, partnership, or other pass through entities. The new tax also affects farms and small businesses by creating up to a $4 million dollar tax deduction for farms and smallbusinesses meeting certain criteria. The details will be explained in a memorandum expected to come outsoon.
See Briggs and Morgan, Estate Planning After The Omnibus Tax Act Of 2013 (House File 677), Lexocology, May 29, 2013.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
