Ohio Form Et 2 – Fill Out and Use This PDF

Ohio Estate Tax Return for all Resident Filings for Dates of Death on or after January 1, 2002

File in duplicate with the Probate Court

ET 2

Rev. 12/01

Name of attorney representing the estate

Address (number and street, city, state and ZIP code)

Telephone

Name of executor/administrator(s)

Address (number and street, city, state and ZIP code)

Telephone

Signature of executor/administrator(s)

Date

Signature of preparer

Date

Date Filed with Probate Court

Distribution of Subdivision’s Share of Tax

(Ohio Revised Code Section 5731.48 and 5731.50)

Date Received by

Ohio Department of Taxation

Net Taxable Estate (from line 3, page 1)

More than $338,333, but not more than $500,000

More than $500,000

Tax Rate

$13,900 + 6% of excess more than $338,333

$23,600 + 7% of excess more than $500,000

8. If widow or widower, was a QTIP deduction elected in the predeceased spouse’s estate? .............................

If yes, please read information below and complete Schedule F.

Yes

No

When an estate tax return is required (R.C. section 5731.21)

Estates with a gross value of more than $338,333 are required to file an estate tax form 2 (revised 12/2001). Executors and administrators are responsible for filing the estate tax re- turn.

Returns are not required to be filed for gross estates with a value of $338,333 or less. How- ever, if the estate consists of real estate and has a value of $338,333 or less, an estate tax form 22 should be filed with probate court to expedite the release of the real estate lien.

What estate tax form is required to be completed (R.C. section 5731.21)

If the date of death was prior to January 1, 2001, Ohio estate tax form 2, revised 3/2000, is required to be filed.

If the date of death was between January 1, 2001-December 31, 2001, Ohio estate tax form 2, revised 1/2001, is required to be filed.

If the date of death is on or after January 1, 2002, Ohio estate tax form 2, revised 12/2001, is required to be filed.

When and where to file (R.C. section 5731.21)

Returns are required to be filed within nine months from decedent’s date of death (see Exten- sion of Time to File, below). All filings must be made in duplicate with the probate court where will is probated or estate is administered.

When and where to pay (tax and interest) (R.C. section 5731.23)

Tax and interest are paid at the county auditor’s office, with the check drawn to the order of the county treasurer. Interest begins to accrue at variable rates nine months from decedent’s date of death. The county auditor will calculate any interest owing.

Estimated payments (R.C. section 5731.23)

An estimated payment can be made prior to the filing of the estate tax return, by using an estate tax form 17. This payment will stop the accrual of interest on the amount of tax paid.

Estimated payments are collected in the same manner as stated on page 6 in When and Where to Pay. If the tax ultimately assessed is more than the estimated payment, interest on the excess will accrue nine months from decedent’s date of death. If the tax ultimately as- sessed is less than the estimated payment, the estate may be eligible for a refund.

Penalties

(R.C. section 5731.22)

Failure to timely file the estate tax return (determined with regard to any approved extension) results in a penalty assessment.

The penalty is five (5) percent per month or any fraction of a month, not to exceed twenty-five

(25)percent of the tax as finally determined. Interest does not accrue on penalty assess- ments.

Nonresident estates (R.C. section 5731.19)

The estate of a nonresident decedent must file estate tax forms 2 and 4 if the decedent owned the following types of property: real property situated in Ohio; tangible personal property having an actual situs in Ohio; and intangible personal property employed in carrying on a business within Ohio (unless exempted under R.C. section 5731.34). The filing requirements are the same as for a resident decedent, except the return may be filed directly with the county probate court where the Ohio property is located.

Additional tax

(R.C. sections 5731.18, 5731.19 and 5731.24)

An additional tax is due when the federal state death tax credit exceeds the Ohio tax paid. If an estate (resident or nonresident) falls into the federal estate tax category, estate tax forms 3 or 3N (additional tax returns) may be required to be filed. The return and payment are due sixty (60) days after the date of the final determination of the federal estate tax liability (closing letter or equivalent as issued by the I.R.S.). The additional tax shall be paid, without notice or demand by the tax commissioner, with the return, and shall be filed and paid in the same manner as the estate tax, except that interest begins to accrue sixty (60) days after the date of the final determination of the federal estate tax liability.

Distribution of tax (R.C. sections 5731.48 and 5731.50)

For dates of death on or after January 1, 2002, eighty (80) percent of the tax is distributed to the municipal corporation, village or township in which the tax originates and twenty (20) percent to the state of Ohio.

Marital deduction (R.C. section 5731.15)

A marital deduction may be taken for certain property interests that pass from the decedent to the surviving spouse. Property interests that should be listed include the following: (1) survivor of tenancy by the entirety or joint tenancy; (2) appointee under decedent’s exercise of a power; (3) statutory interests passing to a spouse as a result of a right of election to take against the will; and (4) bequests from decedent pursuant to will.

Property interests that should not be listed include: (1) property that does not pass from decedent to surviving spouse; (2) qualified terminable interests for which QTIP election is not made; and (3) property that has been disclaimed by a surviving spouse under R.C. section 1339.68.

The gross estate may be valued on the decedent’s date of death or on an alternate valuation date. The alternate valuation date is six months from date of death unless the property item is sold, disposed of or distributed within that six months.

The executor must make an election by checking “yes” in the Elections section of the return. This election is mutually ex- clusive of the federal election. However, it must be elected

within one year and nine months from the date of decedent’s death or within one year from any extensions granted by the tax commissioner. Once made, this election is irrevocable.

If alternate valuation is elected, please list both date of death values and alternate values, and the alternate valuation date on the applicable schedules.

The estate may elect Qualified Farm Property Valuation for determining the value of farm property as an alternative to its fair market value. To have qualified farm property valued at this special valuation, certain conditions must be met.* This elec-

tion must be made on a timely filed return determined with regard to any approved extensions of time to file.

To help expedite the audit, please attach the following:

1.A complete estate tax form 34;

2.Most recent county auditor real estate propertyrecord;

3.Current agricultural use valuation (CAUV) cards (from county auditor);

4.Fair market value appraisal (broken down into one acre homesite, improvements and bare land only).

If the qualified farm property valuation is elected, use the quali- fied farm property value column in Schedule A or identify the qualified property under Schedule E or G.

*Please refer to estate tax Bulletin 5.

The Qualified Terminable Interest Property (QTIP) election al- lows certain life estates held for the surviving spouse to qualify for the marital deduction.

The requirements for QTIP are the following:

1.Surviving spouse must receive all the income for life pay- able annually or at more frequent intervals; and

2.No one can have a power to appoint the property to any person other than the surviving spouse during surviving spouse’s life; and

3.The executor must make an election by checking “yes” in the Elections section of the return. Once the election is

made, it is irrevocable. This election must be made on a timely filed return determined with regard to any approved extensions of time to file.

The executor may make a partial QTIP election only if it is in the form of a fraction or percentage of available QTIP property. The specific interest should be clearly identified as QTIP.

The surviving spouse’s estate must include all QTIP property claimed in the first spouse’s estate, to the extent not con- sumed or given away, at the value on the date of death of the surviving spouse.

Effective for estates of decedents dying on or after January 1, 2001, R.C. section 5731.20 allows a deduction for qualified family-owned business interests. For a qualifying estate, the maximum deduction allowed cannot exceed $675,000. To claim the deduction, the executor must make an R.C. section 5731.20 election (see page 2, Elections by the Executor, item

4)and attach completed federal form 706, Schedule T (Quali- fied Family-Owned Business Interest Deduction) and feder- ally requested statements to the Ohio Estate Tax Return. In addition, each person having an interest in the property must sign a written agreement consenting to the application of the 10-year additional (recapture) tax. The deduction for the value of the qualifying business interest is claimed under Recapitu- lation of Deductions, page 2, of the Ohio return.

R.C. section 5731.20 incorporates by way of statutory refer- encing all dispositive language contained in Internal Revenue Code (I.R.C.) section 2057. Every definition and term used in

I.R.C. section 2057 such as “adjusted value of the qualified family-owned business interest,” “qualified heir,” “member of the family,” “material participation,” “applicable percentage” and “adjusted tax difference” will have the same meaning and ef- fect for purposes of R.C. section 5731.20, unless otherwise provided.

For Ohio, if an estate qualifies, the election to claim the de- duction can be made even if no federal return is required to be filed. Where a federal return is required to be filed, the election can be made for Ohio, even if not made federally. All qualified heirs shall be deemed to have met the Ohio requirement of consenting to the additional (recapture) tax by signing the agreement contained in the federal form 706, Schedule T. When applicable, the tax plus statutory interest will be due no later than the first day of the seventh month following the event causing the imposition of the additional (recapture) tax.