Technical Information Release TIR 98-14: Release of Estate Tax Lien on Real Estate for Dates of Death on or after January 1, 1997
General Laws c. 65C, § 14, provides for an estate tax lien for ten years from the date of death on all assets in the decedent’s gross estate “unless the tax imposed by this chapter is … paid in full.” For dates of death on or after January 1, 1997, the Massachusetts estate tax is imposed only on estates which are required to file a federal estate tax return. G.L. c. 65C, § 2A. Since the Massachusetts estate tax is now based on the credit for state death taxes allowable to the decedent’s estate on the federal estate tax return, taxes that would otherwise be paid to the federal government are paid to Massachusetts.
Prior to this recent change in the law, for these dates of death, the Massachusetts estate tax return, Form M-706 or Form M-706NR, was required to be filed in order to obtain a release of lien even if the decedent’s gross estate was less than the federal filing requirement and a Massachusetts estate tax return would not otherwise be required. The filing included Form M-792, Certificate Releasing Massachusetts Estate Tax Lien, the $10.00 filing fee, and a copy of the recorded deed or certificate of title that created the decedent’s interest.
Recent legislation changes the procedure for releasing the estate tax lien for nontaxable estates of decedents dying on or after January 1, 1997. 1 For these dates of death, Chapter 147 of the Acts of 1998 eliminates the requirement of obtaining a Form M-792 from the Department in order to establish that no estate tax is due. Effective September 9, 1998:
[A]n affidavit of the executor, subscribed to under the pains and penalties of perjury, recorded in the appropriate registry of deeds and stating that the gross estate of the decedent does not necessitate a federal estate tax filing, shall release the gross estate of the lien imposed by this section.
St. 1998, c. 147, § 2, amending G.L. c. 65C, § 14(a).
For purposes of the Massachusetts estate tax, the term “executor” is defined as “the executor or administrator of the decedent, or, if there is no executor or administrator appointed, qualified and acting within the commonwealth, then any person in actual or constructive possession of any property of the decedent.” G.L. c. 65C, § 6(a).
II. For Dates of Death on or after January 1, 1997, Only Estates that are Required to File a Federal Estate Tax Return are Required to File a Massachusetts Estate Tax Return
Form 706, the United States estate tax return, must be filed with the Internal Revenue Service for estates where the gross estate exceeds the applicable exclusion amount under I.R.C. § 2010(c) in effect as of the decedent’s date of death. I.R.C. § 6018. For the estates of decedents dying in 1997, an executor is required to file a federal estate tax return where the gross estate of a decedent, plus adjusted taxable gifts, is $600,000 or more. For estates of decedents dying after 1997, the applicable exclusion amount is scheduled to increase as follows:
See I.R.C. § 2010(c).
For dates of death on or after January 1, 1997, if a federal estate tax return is required to be filed, the executor of the estate of a decedent who was domiciled in Massachusetts must file a Massachusetts Resident Estate Tax Return, Form M-706. G.L. c. 62C, § 17(a). If the estate of a nonresident decedent is required to file a federal estate tax return and the decedent owned or transferred real estate or tangible personal property located in Massachusetts, the executor must file a Massachusetts Nonresident Estate Tax Return and Domicile Affidavit, Form M-706NR.
An executed copy of the federal estate tax return, Form 706, including all schedules and exhibits, must be filed with the Massachusetts estate tax return, Form M-706 or Form M-706NR. In addition, the executor must submit the form M-792, Certificate Releasing Massachusetts Estate Tax Lien, in triplicate, the $10.00 filing fee, and a copy of the recorded deed or certificate of title that created the decedent’s interest.
III. Transition Rules Effective through March 1, 1999 for Nontaxable Estates
For dates of death on or after January 1, 1997, estates are not required to file Form M-706 or Form M-706NR to obtain a release of the estate tax lien on real estate if the gross estate is less than the amount of the federal filing requirement. Under the new law, an affidavit of the executor subscribed to under the pains and penalties of perjury, recorded in the registry of deeds, and stating that the gross estate of the decedent does not necessitate a federal estate tax filing, will release the gross estate of the lien. Although the Department is no longer required to accept and process requests for release of the Massachusetts estate tax lien for these estates, as an accommodation to taxpayers, it will continue to accept and process estate tax returns for estates not requiring a federal filing on an interim basis until March 1, 1999.
After March 1, 1999, only in exceptional cases will the Department accept estate tax returns requesting a release of estate tax lien from estates not requiring a federal filing. The release will be furnished only if there is reason to believe it is needed to permit the transfer of property free from the lien.
Commissioner of Revenue