Tax 10.05(5)(b)9.
9. Whether the joint property was purchased from the sale of assets given to the survivor by the decedent or whether the joint property was purchased from the income derived from assets given to the survivor by the decedent. In either case, whether adequate consideration was given by the survivor for these gifts shall be indicated.
Tax 10.05(5)(b)10.
10. Improvements on the property and sources of the funds, materials or labor.
Tax 10.05 Note
Note: Section
72.12 (6), Stats., relating to the inheritance taxation of joint tenancy property, was enacted by the 1971 legislative session and applies to all deaths which occur on and after May 14, 1972 and prior to July 1, 1976.
Chapter 310, Laws of 1971, which enacted this statute contains the following note after the joint tenancy provision: "Sub. (6) is patterned after s.
291.01 subdivision 4. (1), Minn. Stats. and I.R.C. s. 2040 to tax the transfer of jointly held property in the same manner as the federal method."
Tax 10.05 Note
Under a literal reading of the statute, if property is owned in joint tenancy and one joint tenant dies, the decedent is presumed to have initially acquired the full value of the asset and the survivor or survivors are presumed to inherit and are taxed on the property's full value. A surviving joint tenant will not be subject to the inheritance tax, however, on any portion of the property to which the survivor can show he or she actually contributed.
Tax 10.05 Note
In Department of Revenue v. Kersten (1976),
71 Wis. 2d 757, the court held that contribution is not limited to money or property, but includes the "services, industry and skills" of a joint tenant in the operation of a farm enterprise.
Tax 10.05 Note
Note: This section interprets s.
72.12 (6), 1991 Stats.
Tax 10.05 History
History: Cr.
Register, January, 1977, No. 253, eff. 2-1-77.
Tax 10.06
Tax 10.06
Taxation of joint tenancy property for deaths on or after July 1, 1976. Property held by 2 or more persons with the right of survivorship (hereafter "joint property") shall have the value subject to inheritance tax determined as follows:
Tax 10.06(1)
(1) Completed transfers. Any joint property requiring the signature of all joint tenants to transfer the entire property which, to the extent of unequal monetary contribution, was deemed a gift at the time of its acquisition or the creation of the joint tenancy and any subsequent increments thereto shall have its taxable value determined by dividing the joint property's date of death clear market value, less any liens against the property, by the number of joint tenants on the date of death including the decedent.
Tax 10.06(2)(a)(a) The full date of death clear market value of any joint property requiring the signature of only one joint tenant to transfer the entire property which, to the extent of unequal monetary contribution, was not deemed to be a gift at the time of its acquisition or the creation of the joint tenancy and any subsequent increments thereto shall be subject to inheritance tax. Any portion contributed in money or money's worth by the survivor, as described in
s. Tax 10.05, may be excluded.
Tax 10.06(2)(b)
(b) Unless there is a clear showing to the contrary, the allocation of contribution in money or money's worth shall apply equally to all joint property held by the same joint tenants. The amount is computed as follows:
dollar amount of
survivor's contribution full clear survivor's
to date of death × market value = contribution
full clear of each asset to each asset
value of all joint
property at death
Tax 10.06(3)
(3) Transfers in contemplation of death. Any joint tenancies created or joint tenants added within 2 years of a decedent's date of death are covered by s.
72.12 (4) (a), Stats.
Tax 10.06 Note
Example: 1) The following example shows how to compute the taxable and tax exempt portions of joint property under sub. (1). Assume that the full clear market value of a farm owned in joint tenancy by husband, wife and child is $120,000; that a mortgage of $30,000 exists against the farm and that the husband dies:
-
See PDF for table 
Tax 10.06 Note
The fractional share times the number of surviving tenants (2) equals the joint tenancy exemption for deaths prior to January 1, 1978. On or after January 1, 1978, there is no joint tenancy exemption; the survivor's interests are excluded; and, only the decedent's interest is included in the taxable estate ($30,000).
Tax 10.06 Note
2) The following example shows how to compute the survivor's contribution to joint property under sub. (2) (b). Assume that the surviving joint tenant contributed $20,000 to a farm with a $120,000 date of death value and that the survivor also acquired a $20,000 joint savings account from decedent:
farm:
$20,000 × $120,000 = $17,142.86
$140,000
savings account:
$20,000 × $20,000 = $2,857.14
$140,000
Tax 10.06 Note
While the real estate will be included for inheritance tax at fractional share without considering contribution, it will be necessary to allocate a prorata share of monetary contribution to all joint assets unless it can be clearly traced to a specific asset. In this example, $2,857.14 is available for contribution to the savings account unless it can be clearly shown otherwise.
Tax 10.06 History
History: Cr.
Register, January, 1977, No. 253, eff. 2-1-77.
Tax 10.10
Tax 10.10
Taxation of savings, mortgage and credit life insurance. Tax 10.10(1)(1)
Savings insurance. If, upon the death of a depositor in a financial institution, a life insurance payment is made based on the amount in a savings account of the decedent at the time of death, such payment is taxable as insurance under s.
72.12 (7), Stats. If death is on or after July 1, 1979, the full amount is included as a taxable transfer. If death is prior to July 1, 1979, the following paragraphs identify the extent of the application of the $10,000 insurance exclusion.
Tax 10.10(1)(a)
(a) If the payment is made to a named beneficiary, it shall be includable with other insurance proceeds paid to distributees other than the decedent's estate and shall qualify for the $10,000 insurance exclusion provided in s.
72.12 (7) (b), Stats.
Tax 10.10(1)(b)
(b) If the payment is made to the financial institution and is added to the decedent's account, and if the account was held in joint tenancy, the account will then be paid to the surviving joint tenants. The insurance portion of the account qualifies for the $10,000 insurance exclusion.
Tax 10.10(1)(c)
(c) If the account is solely owned and is paid to the personal representative of the decedent's estate or to the estate itself, the portion of the account representing insurance proceeds shall not qualify for the $10,000 insurance exclusion.
Tax 10.10(1)(d)
(d) If the solely owned account is paid to a distributee who had been designated by the decedent prior to death, the insurance proceeds qualify for the $10,000 exclusion.
Tax 10.10(2)
(2) Mortgage and credit insurance. Life insurance payments made to a creditor upon death of a debtor shall reduce the deduction otherwise allowable in s.
72.14 (1) (a), Stats., as follows:
Tax 10.10(2)(a)
(a) If the debt was secured by the debtor's solely owned property, the insurance shall reduce the deduction otherwise allowable in s.
72.14 (1) (a), Stats., as a debt of the decedent to the extent of the payment. The payment credited to the debt shall not be taxable under
s. 72.12 (7), Stats., unless it exceeds the debt.
Tax 10.10(2)(b)
(b) If the debt is secured by joint tenancy property, the payment of insurance in satisfaction of part or all of the debt shall be considered insurance payable to the surviving joint tenant or tenants in the same manner as to a named beneficiary and shall qualify for the $10,000 insurance exclusion if death is prior to July 1, 1979. There is no insurance exclusion if death is on or after July 1, 1979. This payment shall not reduce the deduction otherwise allowable under s.
72.14 (1) (a), Stats.
Tax 10.10 History
History: Cr.
Register, February, 1978, No. 266, eff. 3-1-78; am. (1) (intro.) and (2) (b),
Register, July, 1982, No. 319, eff. 8-1-82.
Tax 10.11
Tax 10.11
Federal estate tax deductions for deaths on or after July 1, 1979. Tax 10.11(1)
(1) In computing the taxable estate for Wisconsin inheritance tax purposes, a deduction shall be allowed for the full federal estate tax as finally determined and paid.
Tax 10.11(2)
(2) Whenever the federal estate tax paid is not final and conclusive, a deduction may be claimed for the amount of tax due as shown on the return as filed, providing that at least that amount has been paid. If the final federal estate tax paid increases or decreases, the adjustment in the federal estate tax deduction is made within 30 days of final determination by submitting the adjustments with proof to the department of revenue under s.
72.33, Stats. Any additional tax owing should accompany the adjustments. Any refund will be certified upon audit and issued. To expedite processing, the date the original"Certificate Determining Inheritance Tax" (HT-214) was issued should be included with the information.
Tax 10.11 History
History: Cr.
Register, July, 1982, No. 319, eff. 8-1-82.
Tax 10.115
Tax 10.115
Federal estate tax deduction for deaths prior to July 1, 1979. Tax 10.115(1)
(1) In computing the taxable estate for Wisconsin inheritance tax purposes, a deduction shall be allowed for the full federal estate tax as finally determined and paid.
Tax 10.115(2)
(2) To qualify as a Wisconsin inheritance tax deduction, the following conditions must be met:
Tax 10.115(2)(a)
(a) The federal estate tax must be imposed and paid to the United States government.
Tax 10.115(2)(b)
(b) The Wisconsin deduction cannot exceed the actual federal tax paid.
Tax 10.115(2)(c)
(c) The value of each separate item of property on which the deduction is computed shall not exceed the value used for the Wisconsin tax determination. Each item shall be considered individually and a higher value of one item may not offset a lower value on another item.
Tax 10.115(2)(d)
(d) In making the deduction computation, no asset's value shall exceed the value of that asset used for federal estate tax purposes. Further, no adjustment is permitted for the difference between the federal gross estate and the gross estate used for Wisconsin inheritance tax purposes.
Tax 10.115(3)
(3) The procedures to follow in computing the allowable federal estate tax deduction on Schedule L (Form HT-026) are as follows:
Tax 10.115(3)(a)
(a) Reduce the federal gross estate as finally determined by the amount which the value of any asset included for federal estate tax purposes exceeds the value of the asset for Wisconsin inheritance tax purposes. When property is included for federal estate tax purposes but not for Wisconsin inheritance tax purposes, reduce the federal gross estate by the full value of all such property. This includes any portion of joint tenancy property included for federal estate tax purposes and not for Wisconsin inheritance tax purposes, such as the portion of joint tenancy property excluded from inheritance tax as any fractional share of a surviving joint tenant.
Tax 10.115(3)(b)
(b) Recompute the federal estate tax. As necessary, use the actual debts, burial and administration expenses, and recompute the proper marital deduction considering the reduced federal gross estate, the will of the decedent and/or the Wisconsin Statutes.
Tax 10.115 Note
Note: This section interprets ss.
72.14 (1) (e) and
(2), 1991 Stats.
Tax 10.115 History
History: Cr.
Register, February, 1978, No. 266, eff. 3-1-78; renum. from Tax 10.11,
Register, July, 1982, No. 319, eff. 8-1-82.
Tax 10.12(1)
(1) Any Wisconsin or federal income, withholding, unemployment, sales or transfer taxes attributable to a period prior to the decedent's date of death and due by the decedent and unpaid as of the date of death, together with interest and penalties thereon to the date of death, shall be deductible from the decedent's estate for inheritance tax purposes as a debt.
Tax 10.12(2)
(2) Any Wisconsin or federal income, withholding, unemployment, sales or transfer taxes attributable to a period beginning on or after the date of death, together with interest and penalties thereon, or interest and penalties attributable to any taxes in
sub. (1) from the date of death until paid, shall not be deductible from the decedent's estate for inheritance tax purposes. This section does not apply to the federal estate tax deduction under s.
72.14 (1) (e), Stats.
Tax 10.12 Note
Note: This section interprets s.
72.14 (1), 1991 Stats.
Tax 10.12 History
History: Cr.
Register, March, 1978, No. 267, eff. 4-1-78; r. and recr.
Register, July, 1982, No. 319, eff. 8-1-82.
Tax 10.13
Tax 10.13
Apportionment of property qualifying for exception. Each distributee of property qualifying for exception under s.
72.15 (4), Stats., shall report that portion of the total exception based on the ratio that the value of property qualifying for exception distributable to such distributee bears to the total value of the property qualifying for exception distributable to all distributees.
Tax 10.13 Note
Note: This section interprets s.
72.15 (4), 1991 Stats.
Tax 10.13 History
History: Cr.
Register, July, 1982, No. 319, eff. 8-1-82.
