I.                    Information to be gathered in addition to usual questionnaire information:

1.      Family history

2.      Present and past residences

3.      Current visa, passport or residency permit

4.      Resident Alien (RA) owned property – personal and Real Estate and location

5.      Country or countries of citizenship of both spouses

6.      Homes not owned but sometimes occupied

II.                 Transfer Tax  v. Income Tax

Residence - Domicile

III.               Citizenship

A.     Where born?

B.     Parents citizenship status?

C.     Marriage to a USC.

IV.              Residence

A.     Principal or primary home

B.     Intentions to return or leave

C.     Residence and domicile essentially the same in CO

D.     Tax on all citizens or residents under IRC §2001(a)

E.      Regs provide that domicile determines residence CRS §1-2-102(b)

V.                 Application of the Rules

A.     Unified credit – USC – RA treated the same

B.     Unlimited marital deduction  for USC not available to RA

C.     Effect of TAMRA (1988)

1.                  Estate Tax 2010(A), 2056 A

2.                  Gift Tax 2523 (i), 2503(b), annually gifts of $125,000 currently

VI.              Using a QDOT to minimize impact of 2056A Tax

A.     A deferral mechanism

B.     FMV of property placed in QDOT at or within 9 months of death

C.     Distributions from QDOT.  Estate tax paid as occurs based on value in USC’s estate

D.     Pass from Estate to QDOT (20.2056 A, various subsections)

1.                  Post mortem creation of QDOT ok

2.                  QDOT election

3.                  By disclaimer

4.                  Retirement plans assets 20.2056.A-4(b)(7)

5.                  RA change of status to US citizen

a.       Domicile

b.      Distributions after citizenship

E.      Hardship provision

1.                  Exempt from imposition of 2056 Tax on distribution of principal

2.                  Immediate substantial financial need h,m,e,s or h,m,e,s of a person surviving spouse must support

3.                  CO law – natural or adopted children

4.                  No procedure for advanced rulings

VII.            JHP

A.     USC couples

1.                  Joint Tenancy Property – Lifetime Transfers

2.                  No gift tax for USC couples on transfer between spouses

B.     USC-RA Couples

1.                  No marital deduction treatment for transfers to RA spouse during USC spouses lifetime.

a.       No gift tax on the amount transferred but upon later sale is recognized (example in article).

b.      Contributions to improvements or p.p.

2.                  After TAMRA unlimited Marital Deduction does not apply

3.                  Not recognized as interspousal “gift” see 2523(i).

4.                  On sale, deemed to have made a gift

5.                  Pro rata gift for the amount of proceeds received by RA spouse  

VIII.         JHP Subject to Estate Tax

A.     Marital deduction rules do not apply

B.     If USC spouse dies first, 100% of JAP will be included in USC’s estate

C.     If RA spouse contributes to JHP, must prove to have excluded from USC’s estate