PURPOSE: This rule is intended as a guideline as to the matter of allowable claims and deductions against the estate under section 473.360, RSMo 1969 and exceptions thereto under sections 473.367 and 473.370, RSMo (1969), and includes certain procedural methods of tax computations.

NOTE: This regulation is applicable to decedents dying on or before December 31, 1980.

1. (1) Claims against the estate of a deceased person must be filed in the probate court within six (6) months after the first published notice of letters testamentary or of administration (section 473.360, RSMo (1969), except as provided by sections 473.367 and 473.370, RSMo (1969)).
2. (2) The family allowance is properly reported as a deduction and not an exemption. The same is true of exempt property if it has been included in the inventory and subsequently distributed to the surviving spouse.
3. (3) Absent direction by testator to place the burden of federal estate taxes on property which did not generate the federal estate tax, the deduction for inheritance tax purposes of federal estate tax is limited to the proportional part of the federal estate tax which represents a tax on probate assets. Example: The gross Missouri estate divided by the gross federal estate equals the percentage ratio. The percentage ratio times the amount of federal estate tax paid equals the allowable deduction for inheritance tax purposes.
4. (4) Trustee’s commission on the transfer of an interest from the life tenant to the remainderman which is to be paid out of the corpus may be allowed as a deduction to the remainder interest. The commissions are not a deduction for the life tenant, unless the corpus is taxed all to the life tenant with power of appointment on the theory that such a tenant in effect has the fee. The deduction should not be shown on the deduction schedule unless it is added back to the clear net market value of the estate when determining the life estate.
5. (5) If the bequest in a will creates a joint tenancy in the devises, the exemption of the two

6. (2) beneficiaries is totaled and the tax is computed at the average of the combined rates of the beneficiaries. (Op. Atty. Gen. No. 40, January 6, 1971.)

   1. (A) Example. A bequest of fifteen thousand dollars ($15,000) to a son and his wife is computed as follows:

Total value of interest $15,000.00 Less combined exemption of son and daughter-in-law $ 5,500.00 Value of interest subject to tax $ 9,500.00 Times mean rate (1% + 3% = 4% ÷ 2 = 2%) $ .02 Tax due $ 190.00

1. (B) Example. Bequest to devises as joint tenants where there is also a specific bequest to one devisee. If the will creates a joint bequest to son and wife in the amount of twenty thousand dollars ($20,000), and further devises a specific bequest in the amount of fifty thousand dollars ($50,000) to the son, computations would be as follows: Total value of interest in joint bequest $20,000.00 Less combined exemptions of son & daughter-in-law $ 5,500.00 Value of interest subject to tax $14,500.00 Times mean rate (1% + 3% = 4% ÷ 2 = 2%) $ .02 Tax due $ 290.00

Computation of tax on specific bequest of fifty thousand dollars ($50,000) to the son where devisee has an unused remainder in a percentage bracket after calculating interest of bequest to devises as joint tenants.

One-half of $20,000=$10,000–$5000= $5000 (son’s share in 1% bracket)

Value of interest subject to tax = $50,000 (exemption consumed in previous bequest) $20,000–$5000=$15,000×1%= $ 150 $20,000×2%= $ 400 $15,000×3%= $ 450 Tax on specific bequest $1000 Tax on joint bequest $ 290 Total tax due $1290 12 CSR 10-8

1. (6) If the will contains language to the effect that inheritance taxes are not to be charged against or deducted from the share of the devises, but they are to receive their bequests clear of tax, this constitutes the bequest of an additional sum to all specific devises sufficient to pay the tax on their bequests. It does not affect anyone who participates in the residuary. (Op. Atty. Gen. No. 3, October 24, 1938.)

   1. (A) Example. Specific bequest of eighteen thousand dollars ($18,000) to a son—tax on tax computation:

Total value of interest Minus legal exemption Value of interest subject to tax Times rate of tax Amount of tax Tax on $130 × 1%= Tax on $1.30 × 1% = Tax on tax Value of interest Plus tax on tax Total bequest Less exemption Value of interest subject to tax Times rate of tax Total tax due

1. (7) Computing tax on tax when tax falls in the next highest bracket.

Total value of interest Less legal exemption Value of interest subject to tax $20,000 × 3% = $20,000 × 6% = $37,000 × 9% = Amount of tax

Tax on Tax computation: Amount remaining in 9% bracket $3000.00 × 9% = $ 270.00 × 9% = $ 24.30 × 9% = $ 2.19 × 9% = $ .20 × 9% =

Amount remaining in 12% bracket $2130.00 × 12% = $ 255.60 × 12% = $ 30.67 × 12% = $ 3.68 × 12% = $ .44 × 12% =

Tax on Tax $18,000.00 $ 5,000.00 $13,000.00 $ .01 $ 130.00 $ 1.30 $ .01 $ 131.31 $18,000.00 $ 131.31 $18,131.31 $ 5,000.00 $13,131.31 $ .01 $ 131.31

$77,500.00 $ 500.00 $77,000.00 $77,600.00 $ 1,200.00 $ 3,333.00 $ 5,130.00

$270.00 $ 24.30 $ 2.19 $ .20 $ .02 $296.71

$ 255.60 $ 30.67 $ 3.68 $ .44 $ .05 $ 290.44 $ 296.71 $5130.00 $5717.15 Total value of interest $77,500.00 Plus tax on tax $ 5,717.15 Total bequest $83,217.15 Less exemption $ 500.00 Value of interest subject to tax $82,717.15 $20,000.00 × 3%= $ 600.00 $20,000.00 × 6%= $ 1200.00 $40,000.00 × 9%= $ 3600.00 $2717.15 × 12%= $ 326.06 Total tax due $ 5726.06

AUTHORITY: sections 136.030 and 136.120, RSMo 1969.* Inheritance tax rule 61-150 was last filed on Dec. 31, 1975, effective Jan. 10, 1976.

*Original authority: 136.030, RSMo 1945, amended 1947, 1949, 1965 and 136.120, RSMo 1945.