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1. Do I have to file a Maine estate tax return?
If you answer “yes” to either of the following questions, you must file a Maine estate tax return.
A) Is a federal estate tax return required?
If a federal Form 706 is required, then a Maine estate tax return is also required if there is any Maine property in the decedent’s estate.
B) Does the value of the gross estate plus prior taxable gifts plus Maine elective property exceed the filing requirement threshold?
For deaths occurring in 2012, the filing threshold is $1,000,000. For deaths occurring in 2013, the filing threshold is $2,000,000 and prior taxable gifts include only those gifts made within one year before the date of death.
If the answer to questions A) and B) is "no," you probably do not have to file an estate tax return. The fact that a federal Form 706 is not required does not mean that an estate is not liable for Maine estate tax. In 2012 the Maine exclusion is $1,000,000 and the federal exclusion is $5,120,000, creating “gap” estates that are taxable to Maine but not to the federal government. More information on Maine's estate taxability threshold for each year can be found at the Estate Tax homepage on our web site at http://www.maine.gov/revenue/incomeestate/estate .
If an estate not required to file Form 706ME contains real property (land or buildings) or tangible personal property located in Maine, Form 706ME-EZ may be filed for 2012 decedents or Form 700-SOV may be filed for 2013 decedents with a completed Certificate of Discharge of Estate Tax Lien to release the automatic lien on that property. On the date of death, an automatic estate tax lien applies to any property located in Maine that is owned by the decedent. The purpose of the lien is to prevent the property from being sold before the estate tax is paid. See FAQ #3.
If an estate is subject to the probate process in Maine, you may be required to file either Form 706ME-EZ or Form 706ME, even though taxes are not owed. The probate court requires a copy of an official letter from Maine Revenue Services certifying that an estate tax return has been filed (Certification of Filing) and that any tax due has been paid.
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