1 CCR 202-1
RULES AND REGULATIONS ARTICLE 23.5 COLORADO ESTATE TAX Reg. 39-101.1 These rules and regulations shall take effect and be applicable to estates of decedents dying on or after July 1, 1980.
Reg. 39-101.2 The Colorado Department of Revenue may from time to time, and in accordance with law, supplement or revise these rules and regulations.
Reg. 39-101.3 Any rules or regulations promulgated by the Colorado Department of Revenue interpreting the terms and provisions of the Colorado Estate Tax Law shall be, so far as possible, consistent with the rules and regulations relating to the estate and generation-skipping transfer tax laws of the United State's and any judicial decisions and administrative rulings interpreting the same.
Reg. 39-102.1 Factors which may be relevant in determing whether or not a decedent was domiciled in Colorado for purposes of this Act include, by way of illustration and not by way of limitation, the following:
Reg. 39-102.2 The overall statutory limitation on the amount of the Colorado tax levied by the Colorado Estate Tax Law is the maximum amount “allowable” as a credit for state death taxes under Section 2011 and 2602(c) of the Internal Revenue Code. See Section 39-23.5-102(6) and 39-23.5-102(8). Thus, whether or not a tax is payable to Colorado is not necessarily dependant upon whether or not an amount was actually finally credited or allowed by the Internal Revenue Service as a credit for state death taxes paid. A tax will be due to the State of Colorado if mathematically an amount is allowed to be credited against a federal estate or generation-skipping tax liability of a taxpayer after application of the allowable federal unified credit, regardless of whether or not, because of any limitations contained in Section 2011 or 2602(c) of the Internal Revenue Code, a credit for all or a portion of such state death taxes paid is not finally allowed by the Internal Revenue Service because, for instance, such taxes were not actually paid to Colorado and a credit therefore was not claimed within the time limits set forth in Section 2011(c) of the Internal Revenue Code, or the personal representative inadvertently or purposefully failed to claim such a credit even though one was allowable on the federal return as filed. Alternatively, no tax will be due to the State of Colorado, if, for example, no federal estate tax return is required to be filed because the value of the gross estate is less than the filing limitations set forth in Section 6018 of the Internal Revenue Code, but the adjusted taxable estate as that term is defined in Section 2011(b) of the Internal Revenue Code is in excess of $100,000 such that a state death tax credit is computable under Section 2011(b) of the Internal Revenue Code, but is not allowed under Section 2011(f) of the Internal Revenue Code because the computable credit exceeds the amount of federal estate tax imposed by Section 2001 of the Internal Revenue Code reduced by the amount of the unified credit provided by Section 2010 of the Internal Revenue Code.
Reg. 39-102.3 For purposes of Section 39-23.5-102(13), “any person in actual or constructive possession of any property of the decedent” shall not include any corporation, bank, safe deposit institution, or other depository or institution, or person in actual or constructive possession of any property of the decedent as agent of the decedent or custodian of the property, or any similar relationship such as debtor, bailor, or lessor, other than in the capacities set forth in Section 39-23.5-114.
Reg. 39-103.1 “Intangible personal property” includes, by way of illustration and not by way of limitation, stocks, bonds, notes (whether secured or unsecured), bank deposits, cash, accounts receivable, trademarks, copyrights, patents, good will, partnership interests, life insurance policies and other choses in action.
Reg. 39-103.2 “Tangible personal property” includes, by way of illustration and not by way of limitation, goods, wares, merchandise, cattle, implements, vehicles, harvested crops, and all other things corporeal.
Reg. 39-103.3 Real property having an actual situs without the State of Colorado shall not be taxable with respect to a domiciliary decedent where such property is held in a revocable or irrevocable personal trust. Real property having an actual situs within the State of Colorado shall be taxable with respect to a nondomiciliary decedent, including property held in a revocable or irrevocable personal trust. All other indirect interests in property (e.g., partnership corporate) shall for Colorado estate tax purposes be regarded as intangible personal property.
Reg. 39-103.4 The interest of a decedent as a vendor under an executory contract for the sale of land, wherever situated, shall be considered intangible personal property. The interest of a decedent as a vendee under an executory contract for the sale of land, wherever situated, shall be considered an interest in real property.
Reg. 39-103.5 In all cases where a credit or deduction is claimed under Section 39-23.5-103(2)(a) for state death taxes paid to states other than the State of Colorado that are allowable as a credit against the federal estate tax, the taxpayer shall attach to the Colorado return copies of appropriate sheets showing the method by which the credit or deduction was acutally computed and adequate proof of payment of such taxes. Filing of a copy of the official receipts or similar documents issued by and under the seal or signature of the tax authorities of the other states together with copy of the original and any amended tax returns or similar documents filed with the tax authorities of the other states and any adjustments made in the same on audit, shall be deemed to be adequate proof of the payment of such taxes. Other proof, such as cancelled checks, may, in the discretion of the Department, be considered as adequate proof of payment in appropriate circumstances.
Reg. 39-104.1 See Regulations 103.1 through 103.5 for applicable regulations.
Reg. 39-105.1 See Regulations 103.1 through 103.5 for applicable regulations.
Reg. 39-106.1 See Regulations 103.1 through 103.5 for applicable regulations.
Reg. 39-107.1 Tax returns required by this Article must be submitted on forms provided by the Department. All information required by such forms must be supplied in accordance with statute and applicable regulations and instructions issued by the Department.
Reg. 39-107.2 The following forms are used by the Department of Revenue in its dealings with the public in connection with its administration and collection of all taxes due under the Colorado Estate Tax Law. FORM NUMBER DR 1210 Estate Tax Return DR 1227 Certificate of Estate Tax Determination DR 1226 Certificate of Non-Liability DR 1089 Receipt Information may be obtained by writing or contacting the Colorado Department of Revenue, Estate Tax Division, 1375 Sherman Street, Denver, Colorado, 80261, Telephone (303) 839-2386.
Reg. 39-107.3 No person as that term is defined in Section 39-23.5-102(12) shall be entitled to receive a copy of any documents or other information relative to the value of any decedent's estate, or any other particulars set forth or disclosed in any forms filed with respect to any decedent's estate with the Department under the Colorado Estate Tax Law, without either the express written consent of the person who signed such forms or submitted such information, or such person's attorney, as the same appear in the records of the Department, or pursuant to order of a court of competent jurisdiction. Nor shall such person be entitled to receive a copy of any form issued by the Department in connection with any decedent's estate unless such person would have been entitled to the same in the original or can demonstrate to the satisfaction of the Department that such person has a legitimate need for the same. No such disclosure shall be made and no such copies shall be provided if the same knowingly would be in violation of any confidentiality provisions of the laws of Colorado, any other state, or the United States.
Reg. 39-107.4 In order to obtain a Certificate of Non-Liability as provided in 39-23.5-107(4), even though the estate is not subject to any tax under this article the estate must file a Colorado Estate Tax Return. Under these circumstances however, the estate has only to check the applicable statement on the return and complete Sections 1 and 3 of the return. Upon receipt of such a return the Certificate of Non-Liability will be issued.
Reg. 39-107.5 In addition to the mandated statutory provision that a true copy of an extension of time granted for the filing of the federal return be filed with the Department within thirty days of issuance, the Department requests that any such extension granted also be attached to the Colorado return upon the filing of the Colorado return.
Reg. 39-110.1 The Department does retain the authority and option of granting a waiver of the penalty imposed by 39- 23.5-110 notwithstanding the denial of such waiver by the federal authority. The estate has the sole responsibility of requesting wavier in such cases and has the burden of establishing the existence of reasonable cause.
Reg. 39-111.1 The written notice to be given to the Department pursuant to Section 39-23.5-111(2) shall consist of the filing of appropriate evidence of the final determination of the federal tax. Where applicable, such evidence shall consist of a copy of any final audit adjustments; any receipts for the payment of federal tax, interest and penalties; any closing letters; and any compromise agreements. If such final determination results in any additional Colorado tax being due, the taxpayer also shall file an amended Colorado return and pay any additional Colorado tax due as provided in Section 39-23.5-111.
Reg. 39-111.2 The term “Final Determination” as used in this article is intended to have the same meaning as does its use in the “Internal Revenue Code of 1954,” as amended, or any similar section enacted on or after January 1, 1980.
Reg. 39-112.1 In order to claim a refund as provided for in Section 39-23.5-112, the estate must file an amended Colorado Return within the time provided for by statute. Such return must be clearly marked as an amended return and must show a calculation of the amount of refund claimed to be due.
Reg. 39-113.1 The failure to file a Colorado tax return due to reasonable cause shall not be considered a willful failure to file.
Reg. 39-113.2 An adjustment in value of a reported asset or deduction, which adjustment is made by either the estate or the I.R.S., shall not be considered a willful filing of a false return.
Reg. 39-113.3 The determination of whether subsequently reported assets constitute a willful filing of a false return shall be examined on a case by case basis by the Department.
Reg. 39-114.1 A corporation, bank, stock transfer agent, safe deposit institution or other depository or institution, or person in actual or constructive possession of any property of the decedent as agent of the decedent or custodian of the property or any similar relationship such as debtor, bailor or lessor, other than in the capacities set forth in Section 39-23.5-114, shall not be included within the persons described in Section 39-23.5-114. Such corporation, bank, stock transfer agent, safe deposit institution or other depository or institution, or person shall not be liable for any tax, penalty, or interest if the estate tax is not paid.
Reg. 39-114.2 The discharge of a personal representative, or a fiduciary other than a personal representative, pursuant to Section 2204, of the Internal Revenue Code of 1954, as amended, shall operate as a discharge of such person for the purposes of this Article. The receipt of writing showing such discharge for federal estate tax liability shall be proof of discharge for purposes of this Article.
Reg. 39-115.1 The executive director of the Colorado Department of Revenue may delegate the authority and appoint the personnel necessary for the proper implementation of the provisions of this Article.