State Codes and Statutes

Statutes > Connecticut > Title12 > Chap216 > Sec12-376b

      Sec. 12-376b. Optional payment in installments up to ten years when interest in closely held business exceeds thirty-five per cent of gross estate. (a) Whenever the value of an interest in a closely held business, as defined in subsection (b) of this section, included in the gross estate of any decedent exceeds an amount determined as thirty-five per cent of the value of such gross estate, the fiduciary of such estate may elect to pay all or part of the tax imposed under this chapter in equal annual installments but not in excess of ten such installments. The maximum amount of tax which may be paid in such installments shall be an amount which bears the same ratio to the tax imposed under this chapter with respect to such decedent's estate as the value of such interest in a closely held business bears to the total value of such gross estate. The amount of tax paid in such installments shall bear interest in relation to the unpaid portion of such tax from the expiration of six months after the death of the decedent until such tax is paid at the rate of one per cent per month or fraction thereof. If the fiduciary of such estate elects to pay such tax or any portion thereof in accordance with this section, notice of such election shall be filed in writing with the Commissioner of Revenue Services not later than six months after the date of death of the decedent. The first such installment payment, including interest, shall be due not later than sixty days immediately following determination by said commissioner of the amount of tax applicable to such estate under this chapter. If such interest in a closely held business is transferred from such estate or if the fiduciary fails to make the first installment payment, including interest, or if the fiduciary fails to make any subsequent installment payment, including interest, within twelve months immediately following such preceding payment, such estate shall cease to be eligible for the payment procedure allowed in accordance with this section. Whenever the tax imposed under this chapter is paid in installments as provided in this section, the fiduciary of the estate shall deposit with the Commissioner of Revenue Services a surety bond, or such other form of security deemed acceptable by said commissioner, in an amount equivalent to the tax to be paid in such installments.

      (b) For purposes of this section "closely held business" means (1) a trade or business carried on as a sole proprietorship, (2) a trade or business carried on as a partnership, provided (A) twenty per cent or more of the total capital interest in such partnership is included in determining the gross estate of the decedent or (B) such partnership had fifteen or fewer partners at the time of the decedent's death, or (3) a trade or business carried on as a corporation, provided (A) twenty per cent or more in value of the voting stock of such corporation is included in determining the gross estate of the decedent or (B) such corporation had fifteen or fewer shareholders.

      (c) The provisions of this section shall be applicable to the estate of any person whose death occurs on or after July 1, 1985. The estate of any person whose death occurs prior to July 1, 1985, shall be subject to the provisions of this chapter in effect at the time of such person's death.

      (P.A. 83-289, S. 1, 2; P.A. 85-530, S. 1, 2; P.A. 90-148, S. 18, 34; P.A. 95-26, S. 16, 52.)

      History: P.A. 85-530 increased the maximum number of installment payments allowed from three to ten and provided that such installments shall bear interest at a rate equivalent to that applicable for purposes of underpayment of federal income tax on the tax due date immediately preceding the date of determination of interest for purposes of installments payable under this section; P.A. 90-148 amended Subsec. (a) by reducing the period after the death of the decedent following which installments shall bear interest and during which notice must be filed of election to pay in installments, from nine to six months in both cases, effective July 1, 1990, and applicable to the estate of any transferor whose death occurs on or after that date; P.A. 95-26 amended Subsec. (a) to lower interest rate from the established federal rate for underpayment to 1% per month, effective July 1, 1995, and applicable to taxes due and owing on or after July 1, 1995, whether or not those taxes first became due before said date.