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Tax return doesn't require attached appraisal

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Indiana code doesn't require an estate to file an appraisal with its inheritance tax return, the Indiana Tax Court decided in two opinions handed down Wednesday.

At issue in IndianaDept. of State Revenue, Inheritance Tax Division v. Estate of Doris K. Parker, deceased,  No. 49T10-0812-TA-72, and Ind. Dept. of State Revenue, Inheritance Tax Div. v. The Estate of Marjean M. Ogle, No. 49T10-0906-TA-30, the Department of State Revenue appealed probate court determinations of inheritance tax liability. The department claimed the estates were required to file an appraisal by a licensed appraiser with their tax returns under Indiana Code Section 6-4.1-4-1.

In Parker, Doris Parker's estate filed its inheritance tax return reporting the fair market value of Parker's life estates, and the total fair market value of a family farm. That included nearly $70,000 in improvements Parker's daughter Willa Dean had made to the property. The estate didn't attach a formal appraisal to the return and the probate court held only the value of Parker's life estates were subject to the tax.

In Ogle, Marjean Ogle's estate attached an appraisal prepared by a local real estate broker.

I.C. Section 6-4.1-4-1 doesn't require an estate to get an appraisal valuing its assets at the fair market value, nor does it require an estate to file the appraisal with its inheritance tax return, concluded Judge Thomas Fisher. The judge disagreed with the department's claim that its regulation 45 IAC 4.1-4-3, which requires a formal appraisal by a licensed appraiser, should be enforced because it clarifies the statute. That regulation doesn't state that an estate must get and then submit the appraisal with its tax return.

"If the legislature had intended for the Estate to substantiate its own opinion as to the fair market value of its assets by attaching an appraisal to its return, it would have stated as much," he wrote in Parker.

Judge Fisher also ruled the probate court erred in holding that only the value of Parker's life estates were subject to the inheritance tax, and erred by deducting the monetary value of the improvements Willa Dean made to the farm while living there in computing the estate's tax liability. The judge remanded Parker for calculation of the proper amount of inheritance tax and interest.

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  1. Your article is a good intro the recent amendments to Fed.R.Civ.P. For a much longer - though not necessarily better -- summary, counsel might want to read THE CHIEF UMPIRE IS CHANGING THE STRIKE ZONE, which I co-authored and which was just published in the January issue of THE VERDICT (the monthly publication of the Indiana Trial Lawyers Association).

  2. Thank you, John Smith, for pointing out a needed correction. The article has been revised.

  3. The "National institute for Justice" is an agency for the Dept of Justice. That is not the law firm you are talking about in this article. The "institute for justice" is a public interest law firm. http://ij.org/ thanks for interesting article however

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