Discussion:706 VS 1041 making the 642 election

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Discussion Forum Index --> Basic Tax Questions --> 706 VS 1041 making the 642 election

Discussion Forum Index --> Tax Questions --> 706 VS 1041 making the 642 election

Clapdaddy (talk|edits) said:

6 July 2013
Can one make the election for ONLY federal or State purposes? I have a client where it would be advantageous to make election for fed purposes but waive for state purpsoes as they have a taxable estate for state but not federal purposes. There is sufficient income to need deductions for the federal 1041. If this is possible, then I assume there would be state adjustments for the K-1s.

Ckenefick (talk|edits) said:

6 July 2013
If you don't make it for Fed, I don't see how you could make it for state, simply because it's a federal election...unless the state in question has a law specifically allowing for a separate state election.

And, if you make it for Fed, and claim the decuctions on the federal 1041, I'm thinking you've made it for state as well, assuming the starting point on the state 1041 is "federal taxable income."

Dennis (talk|edits) said:

6 July 2013
I can only speak to New York and offer only what I was told by the State specialists. New York computes its estate tax based on the federal law that existed back when the unified credit sheltered only $1 million. It is self contained and deductions against NY taxable estate are not affected by a current federal election under Sec. 642(g). Further, since NY bases its income tax on Federal income and no one has bothered to author legislation requiring adjustments in this case a Federal election does not require an addback for state income purpose.

Does not make sense to me that making the required statement to the IRS could possibly have anything to do with a return the IRS has no authority over...♫

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