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History
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Full text
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Sponsor's memo
BILL NUMBER:S8478
Title of bill
An act to amend the tax law, in relation to adjusting the federal adjusted gross income for personal income tax purposes
Purpose
To address the issue of a double-tax by New York State on inherited property.
Summary of provisions
Section 1. Amends subsection (c) of section 612 of the tax law by adding a new paragraph 39.
Section 2. Effective date.
Justification
Before the 2010 repeal of the federal estate tax the liability for the tax was computed on the fair market value of the prop- erty included in the estate. That value became the value an heir used to report any gain or loss when inherited property was sold. This resulted in only one tax, at the estate level, being collected.
Although the federal estate tax was repealed for 2010 something called carryover basis was enacted. Now when an heir sells inherited property they pay the capital gain tax the decedent never did. For example, if the decedent paid $1 for a painting that was worth $1 million at death and the heir sold it $1 million, the heir reports a $1 million profit (less the $1 paid for the painting) on their federal tax return. Here again only one tax is paid. This time by the heir and not the estate.
New York Tax Law, Article 26, Section 612(a) looks to Federal Income with certain modifications in taxing a resident. Since the $1 million profit referred to in the example above would be included in a resi- dent's federal income, New York ends up taxing it twice, once at the estate level on the $1 million value and again on the heir's NYS personal income tax return on that value as well.
Legislative history
New Bill.
Fiscal implications
TBD
Effective date
This act shall take effect on the sixtieth day after it shall become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.