On Saturday I wrote about the Connecticut estate tax, so today my focus is on the Connecticut gift tax, which applies to gifts made on or after January 1, 2005:
- The Connecticut gift tax applies to Connecticut taxable gifts, which are taxable gifts as determined for federal gift tax purposes that are (1) gifts of Connecticut real property; (2) gifts of tangible personal property situated within Connecticut; or (3) gifts of intangible personal property made by Connecticut residents.
- Connecticut gift tax is due when the aggregate amount of Connecticut taxable gifts made during all calendar years beginning on or after January 1, 2005 exceeds $2,000,000.
- For Connecticut taxable gifts made during calendar years beginning on or after January 1, 2005, taxpayers will be required to file a Connecticut gift tax return even if no Connecticut gift tax is due. (In the past, if no Connecticut gift tax was due, no Connecticut gift tax return was required to be filed.)
- Once the $2,000,000 threshold is exceeded, Connecticut gift tax is due on the aggregate amount, including the first $2,000,000.
- The tax rate is a progressive rate starting with 5.085% of the first $100,000 over the threshold and rising to 16% for the amount above $10,100,000.
- The Connecticut estate and gift tax exemptions are a unified amount, meaning that lifetime gifts and the value of the estate are added together to figure out the total tax.
This information is complements of the Connecticut Department of Revenue Services.
The bottom line - Connecticut gift tax is due and payable only when the aggregate amount of all Connecticut taxable gifts made on or after January 1, 2005 exceeds $2,000,000. However, if a taxable gift of any amount as determined for federal gift tax purposes is made, then a Connecticut gift tax return must be filed.
- What is the Gift Tax?
- Are Gifts to Your Spouse Taxable?
- Understanding Connecticut Estate Taxes
- Estate Planning in Connecticut by Lisa Nachmias Davis, Esq.
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