Instructions for Form M-6 - Hawaii Estate Tax Return

ADVERTISEMENT
INSTRUCTIONS
STATE OF HAWAII - DEPARTMENT OF TAXATION
FORM M-6
INSTRUCTIONS FOR FORM M-6
(REV. 2018)
HAWAII ESTATE TAX RETURN
(NOTE: References to “married” and “spouse” are also references to “in a civil union” and “civil union partner,” respectively.)
Civil Union — Effective January 1, 2012, civil unions are recog-
Changes You Should Note
nized in Hawaii. Civil unions entered into in a jurisdiction other than
Act 27, Session Laws of Hawaii (SLH) 2018, conforms the Hawaii
Hawaii are also recognized, provided that the relationship meets
Estate and Generation-Skipping Transfer Tax Law to the Internal
Hawaii’s eligibility requirements, has been entered into in accor-
Revenue Code (IRC) as amended as of December 31, 2017 with
dance with the laws of the other jurisdiction, and can be docu-
the exception of the excludable amount of $5,490,000. The exclu-
mented. However, registered domestic partnerships, civil unions, or
sion amount of $5,490,000 is set forth for the decedent in chapter
other similar formal relationships that are not marriages under state
11 of the IRC as amended as of December 21, 2017. For the 2018
law are not considered marriages for federal tax purposes. Since
tax year, the federal excludable base amount is set at $10,000,000
the federal government does not recognize partners in civil unions
plus C-CPI-U for the preceding calendar year, causing a “Gap” be-
as married individuals for federal income tax purposes, partners
tween the federal and state excludable amount.
in civil unions will continue to file as unmarried individuals on their
federal estate tax returns.
Although Hawaii does not have a gift tax, the applicable exclu-
sion amount is reduced by the federal adjusted taxable gift(s) made
The IRC provisions referred to in Hawaii’s Estate and Genera-
by the decedent.
tion-Skipping Transfer Tax Law that apply to a taxpayer and spouse,
spouses, or person in a legal marital relationship, including same-
If you are not required to file federal Form 706, but are required
sex marriages, shall apply to partners in a civil union with the same
to file Hawaii Form M-6, Hawaii Estate Tax Return, due to the ex-
force and effect as if they were “husband and wife,” “spouses,” or
cludable gap between the federal and state, you should complete
other terms that describe persons in a legal marital relationship. Ac-
a “Computed-Hawaii only” Form 706 to arrive at the Hawaii taxable
cordingly, references to “married” and “spouse” are also references
estate amount. See Special Instructions - For Estates Required to
to “in a civil union” and “civil union partner,” respectively. For Hawaii
File a Hawaii Return but not a Federal Return.
estate tax purposes, civil union couples have the same tax filing
options as married couples.
General Instructions
For estate tax purposes, marital status is determined as of the
Purpose of Form — Hawaii does not have a gift tax or an inheri-
date of death of the decedent. Partners in civil unions should be
tance tax, but it does have an estate tax for estates of decedents
aware that while the Internal Revenue Service will not permit the
dying after January 25, 2012. For persons dying after January 25,
marital deduction for federal estate tax purposes, estates subject to
2012, the Hawaii Estate and Generation-Skipping Transfer Tax is
the Hawaii estate tax may take the deduction up to the maximum
imposed on the transfer of the taxable estate of every resident and
amount allowed.
the taxable estate located in Hawaii of every nonresident.
Portability of the Deceased Spousal Unused Exclusion (DSUE)
The federal Estate Tax Return (Form 706, Revised 8/2017, or
— The federal Tax Relief Act of 2010 introduced portability of the
Form 706-NA, Revised 8/2013) and its related instructions must be
DSUE amount into the estate tax system. Portability provides that
used to determine the Hawaii taxable estate.
any unused basic exclusion amount that remains at the death of
the first spouse (called the “deceased spousal unused exclusion
Generation-skipping transfers due to taxable distributions or tax-
amount”) may be used by the surviving spouse, in addition to the
able terminations made after June 30, 1994 and before January
surviving spouse’s own exemption. If the surviving spouse has had
1, 2005 or on or after May 1, 2010 are reported using the Hawaii
more than one predeceased spouse, the DSUE is limited to (a)
Generation-Skipping Transfer Tax Report, Form M-6GS.
the lesser of $5,490,000 or (b) the unused exclusion of the last
Which Estates Must File — If the decedent was a resident of Ha-
predeceased spouse. Portability can only be elected on a timely
waii or a nonresident of Hawaii, but a U.S. resident or U.S. citi-
filed estate tax return of the predeceased spouse whose exemp-
zen, and the taxable estate (federal Form 706, Part 2, line 5) is
tion is intended to be used, regardless of whether the estate of the
$5,490,000 or less, no estate tax return is required. However, the
predeceased spouse is otherwise required to file a tax return. To
estate of a decedent with a surviving spouse must timely file a re-
claim the predeceased spouse’s exclusion amount for the surviving
turn. File this return to elect portability of the deceased spousal
spouse, the personal representative of the predeceased spouse
unused exclusion (DSUE) amount, to the surviving spouse.
will need to file a Hawaii estate tax return even if the predeceased
spouse’s estate is not taxable.
If the decedent was a nonresident not citizen and the taxable
estate (federal Form 706-NA, Part II, line 3) is $60,000 or less, no
Portability applies only to decedents who pass away after Janu-
return is required.
ary 25, 2012 who were U.S. residents or U.S. citizens, and who
were validly married on the date of death or in a Hawaii civil union
However, the personal representative or person(s) in posses-
or the equivalent. Portability does not apply to decedents who were
sion, control, or custody of the property must file a Request for Re-
nonresidents not citizens except where allowed by any applicable
lease (Form M-6A) with the Department of Taxation (Department) if
treaty obligation of the United States. If applicable, attach a state-
they wish to obtain a release, which indicates that the personal rep-
ment to the return that refers to the particular treaty applicable to
resentative or person(s) in possession, control, or custody are free
the estate and for which the estate is claiming its benefits. The
from taxes under chapter 236E, Hawaii Revised Statutes (HRS).
DSUE amount cannot exceed $5,490,000 or the amount of the un-
Same Sex Marriages — Effective December 2, 2013, same-sex
used basic exclusion amount, whichever is less.
marriages are recognized in Hawaii. Hawaii’s law recognizes mar-
See Special Instructions Only if Filing a Hawaii Return to Claim
riages between individuals of the same-sex, and extends to such
Portability.
same-sex couples the same rights, benefits, protections, and re-
sponsibilities of marriage that opposite-sex couples receive.
Who Must File — Form M-6 must be filed by the personal rep-
resentative of the decedent’s estate. A “personal representative”
means the personal representative of a decedent appointed under
INSTRUCTIONS
STATE OF HAWAII - DEPARTMENT OF TAXATION
FORM M-6
INSTRUCTIONS FOR FORM M-6
(REV. 2018)
HAWAII ESTATE TAX RETURN
(NOTE: References to “married” and “spouse” are also references to “in a civil union” and “civil union partner,” respectively.)
Civil Union — Effective January 1, 2012, civil unions are recog-
Changes You Should Note
nized in Hawaii. Civil unions entered into in a jurisdiction other than
Act 27, Session Laws of Hawaii (SLH) 2018, conforms the Hawaii
Hawaii are also recognized, provided that the relationship meets
Estate and Generation-Skipping Transfer Tax Law to the Internal
Hawaii’s eligibility requirements, has been entered into in accor-
Revenue Code (IRC) as amended as of December 31, 2017 with
dance with the laws of the other jurisdiction, and can be docu-
the exception of the excludable amount of $5,490,000. The exclu-
mented. However, registered domestic partnerships, civil unions, or
sion amount of $5,490,000 is set forth for the decedent in chapter
other similar formal relationships that are not marriages under state
11 of the IRC as amended as of December 21, 2017. For the 2018
law are not considered marriages for federal tax purposes. Since
tax year, the federal excludable base amount is set at $10,000,000
the federal government does not recognize partners in civil unions
plus C-CPI-U for the preceding calendar year, causing a “Gap” be-
as married individuals for federal income tax purposes, partners
tween the federal and state excludable amount.
in civil unions will continue to file as unmarried individuals on their
federal estate tax returns.
Although Hawaii does not have a gift tax, the applicable exclu-
sion amount is reduced by the federal adjusted taxable gift(s) made
The IRC provisions referred to in Hawaii’s Estate and Genera-
by the decedent.
tion-Skipping Transfer Tax Law that apply to a taxpayer and spouse,
spouses, or person in a legal marital relationship, including same-
If you are not required to file federal Form 706, but are required
sex marriages, shall apply to partners in a civil union with the same
to file Hawaii Form M-6, Hawaii Estate Tax Return, due to the ex-
force and effect as if they were “husband and wife,” “spouses,” or
cludable gap between the federal and state, you should complete
other terms that describe persons in a legal marital relationship. Ac-
a “Computed-Hawaii only” Form 706 to arrive at the Hawaii taxable
cordingly, references to “married” and “spouse” are also references
estate amount. See Special Instructions - For Estates Required to
to “in a civil union” and “civil union partner,” respectively. For Hawaii
File a Hawaii Return but not a Federal Return.
estate tax purposes, civil union couples have the same tax filing
options as married couples.
General Instructions
For estate tax purposes, marital status is determined as of the
Purpose of Form — Hawaii does not have a gift tax or an inheri-
date of death of the decedent. Partners in civil unions should be
tance tax, but it does have an estate tax for estates of decedents
aware that while the Internal Revenue Service will not permit the
dying after January 25, 2012. For persons dying after January 25,
marital deduction for federal estate tax purposes, estates subject to
2012, the Hawaii Estate and Generation-Skipping Transfer Tax is
the Hawaii estate tax may take the deduction up to the maximum
imposed on the transfer of the taxable estate of every resident and
amount allowed.
the taxable estate located in Hawaii of every nonresident.
Portability of the Deceased Spousal Unused Exclusion (DSUE)
The federal Estate Tax Return (Form 706, Revised 8/2017, or
— The federal Tax Relief Act of 2010 introduced portability of the
Form 706-NA, Revised 8/2013) and its related instructions must be
DSUE amount into the estate tax system. Portability provides that
used to determine the Hawaii taxable estate.
any unused basic exclusion amount that remains at the death of
the first spouse (called the “deceased spousal unused exclusion
Generation-skipping transfers due to taxable distributions or tax-
amount”) may be used by the surviving spouse, in addition to the
able terminations made after June 30, 1994 and before January
surviving spouse’s own exemption. If the surviving spouse has had
1, 2005 or on or after May 1, 2010 are reported using the Hawaii
more than one predeceased spouse, the DSUE is limited to (a)
Generation-Skipping Transfer Tax Report, Form M-6GS.
the lesser of $5,490,000 or (b) the unused exclusion of the last
Which Estates Must File — If the decedent was a resident of Ha-
predeceased spouse. Portability can only be elected on a timely
waii or a nonresident of Hawaii, but a U.S. resident or U.S. citi-
filed estate tax return of the predeceased spouse whose exemp-
zen, and the taxable estate (federal Form 706, Part 2, line 5) is
tion is intended to be used, regardless of whether the estate of the
$5,490,000 or less, no estate tax return is required. However, the
predeceased spouse is otherwise required to file a tax return. To
estate of a decedent with a surviving spouse must timely file a re-
claim the predeceased spouse’s exclusion amount for the surviving
turn. File this return to elect portability of the deceased spousal
spouse, the personal representative of the predeceased spouse
unused exclusion (DSUE) amount, to the surviving spouse.
will need to file a Hawaii estate tax return even if the predeceased
spouse’s estate is not taxable.
If the decedent was a nonresident not citizen and the taxable
estate (federal Form 706-NA, Part II, line 3) is $60,000 or less, no
Portability applies only to decedents who pass away after Janu-
return is required.
ary 25, 2012 who were U.S. residents or U.S. citizens, and who
were validly married on the date of death or in a Hawaii civil union
However, the personal representative or person(s) in posses-
or the equivalent. Portability does not apply to decedents who were
sion, control, or custody of the property must file a Request for Re-
nonresidents not citizens except where allowed by any applicable
lease (Form M-6A) with the Department of Taxation (Department) if
treaty obligation of the United States. If applicable, attach a state-
they wish to obtain a release, which indicates that the personal rep-
ment to the return that refers to the particular treaty applicable to
resentative or person(s) in possession, control, or custody are free
the estate and for which the estate is claiming its benefits. The
from taxes under chapter 236E, Hawaii Revised Statutes (HRS).
DSUE amount cannot exceed $5,490,000 or the amount of the un-
Same Sex Marriages — Effective December 2, 2013, same-sex
used basic exclusion amount, whichever is less.
marriages are recognized in Hawaii. Hawaii’s law recognizes mar-
See Special Instructions Only if Filing a Hawaii Return to Claim
riages between individuals of the same-sex, and extends to such
Portability.
same-sex couples the same rights, benefits, protections, and re-
sponsibilities of marriage that opposite-sex couples receive.
Who Must File — Form M-6 must be filed by the personal rep-
resentative of the decedent’s estate. A “personal representative”
means the personal representative of a decedent appointed under
INSTRUCTIONS
FORM M-6
(REV. 2018)
PAGE 2
chapter 560, HRS, and includes an executor as defined under sec-
situs in this State. Deferred payments and installment payments,
tion 2203 of the IRC, administrator, successor personal representa-
with interest, shall be paid at the same time and in the same man-
tive, special administrator, and persons who perform substantially
ner as payments of the federal transfer tax are required to be made
the same function under the law governing their status.
under the federal extension. Calculate the amount of interest on un-
paid amounts at the rate of 2/3 of 1% per month or part of a month.
When to File — Form M-6 is due nine months after the date of the
If the IRS accelerates the payment of the tax, any amount due shall
decedent’s death. An extension to file Form M-6 is based on the
be accelerated for Hawaii purposes. Attach a copy of the approved
federal extension to file the federal estate tax return. An automatic
federal Form 4768 to Form M-6. Also, attach any documents that
six-month extension to file Form M-6 will be granted if: (1) a copy
are required to be attached to federal Form 706.
of the IRS approved extension to file the federal estate tax return
(federal Form 4768) is attached to Form M-6; and (2) Form M-6 is
Amount Paid with Extension — Persons who will be filing Form
filed by the due date specified by the IRS for filing the federal estate
M-6 after the filing deadline (nine months after the date of the dece-
tax return. An extension of time to file does not extend the time to
dent’s death) because they have requested an automatic extension
pay. If a request for extension has been denied by the IRS, there
of time to file must make a tax payment prior to filing Form M-6 by
will be no penalty for late-filing assessed if Form M-6 is filed within
submitting Form VP-2 and payment for the taxes due. Include this
the time specified by the IRS for filing the federal estate tax return.
amount on Schedule D, line 5.
Attach a copy of federal Form 4768 showing the date on which the
Required Attachments — The following items must be submitted
return may be filed without penalty.
with Form M-6:
If you are not required to file the federal estate tax return (federal
- Federal Form 706 (Revised 8/2017) completed through
Form 4768) due to the excludable gap, you must file Form M-68
Part 2, line 12 or
for an automatic six-month extension. An automatic extension of
time for filing a return shall be allowed only upon the following two
- Federal Form 706-NA (Revised 8/2013) completed through
conditions: (1) on or before the due date of the return prescribed
Part II, line 8;
by the statute, there shall have been paid, through a payment; and
- Federal schedules with federal Forms 712, as required;
(2) within the time specified by the automatic extension, the report
shall be filled, accompanied by payment of the remaining tax liabil-
- Death certificate;
ity. If these conditions are not met, the delinquent penalty and inter-
est will be charged on the tax as if no extension had been granted.
- Will;
Where to File — Mail Form M-6 and payment in full to:
- Trusts;
- Power of appointment documents;
Hawaii Department of Taxation
P. O. Box 259
- A copy of another state’s estate tax return or foreign estate tax
Honolulu, Hawaii 96809-0259
return, if the estate is subject to other estate taxes; and
Payment of Tax — The due date of payment is the same as the
- Any valuations or appraisals.
time for filing the return (see When to File on page 1). However,
Amended Return — An amended return must be filed for any
any tax due that is not paid by the due date will incur interest from
changes made to Form M-6. Check the box on Form M-6, page 1,
the due date, regardless of any extension of time to file the return.
to indicate that it is an amended return. Complete Form M-6 with
An extension for payment of taxes will be granted if an extension of
all of the correct information and attach Schedule AMD, Explana-
payment has been granted by the IRS or the Department of Taxa-
tion of Changes on Amended Return, to the return. Also, attach all
tion. An IRS approved copy of federal Form 4768 or Form M-68
schedules, forms, and other documents required to file a complete
(whichever is applicable) must be submitted with Form M-6. If a
return. Attach any federal Form 706 schedules affected by the cor-
request for extension of time to pay the federal estate tax is denied
rections or changes.
by the IRS, there will be no penalty assessed if the Hawaii estate
tax is paid within the time specified by the IRS.
Penalty and Interest —
The tax is due nine months after the date of the decedent’s
(a) Penalty for failure to file is equal to 5% of the tax due
death. Pay the amount shown on Schedule D, line 6 of this return.
for each month or part of a month that the return is
Attach a check or money order payable to “Hawaii State Tax Collec-
delinquent, up to a maximum of 25% of the tax payable.
tor” to the return. Please write the decedent’s name, social security
number and “Form M-6” on the check. Pay in U.S. dollars drawn on
(b) Penalty for failure to pay after filing timely return is 20%
any U. S. bank. Do not send cash.
of the tax unpaid within 60 days of the prescribed due
date.
IRC Section 6166 Installment Payments — If the gross estate
includes an interest in a closely-held business, you may be able to
(c) Interest at the rate of 2/3 of 1% per month or part
elect to pay part of the federal estate tax in installments under IRC
of a month shall be assessed on unpaid taxes and
section 6166. If the federal estate tax is paid in installments under
penalties beginning with the first calendar day after
IRC section 6166, then an election may be made to pay part of the
the date prescribed for payment, whether or not that
Hawaii estate tax in installments.
first calendar day falls on a Saturday, Sunday, or legal
holiday.
The portion of the Hawaii estate tax which is subject to deferral
or payable in installments is determined by multiplying the Hawaii
estate tax by a fraction, the numerator of which is the gross value
of the assets included in the transferred property having a tax situs
in this State and for which the IRS has granted a deferred or in-
stallment payment plan, and the denominator of which is the gross
value of all assets included in the transferred property having a tax
INSTRUCTIONS
FORM M-6
(REV. 2018)
PAGE 3
Where to Get More Information — More information is available
IRC Section 6166 Installment Payments — If you desire to
on the Department’s website at tax.hawaii.gov or you may contact
make an Internal Revenue Code (IRC) section 6166 election to pay
a customer service representative at:
the Hawaii estate tax attributable to closely held business interests
in installments, attach a notice of election to the Form M-6 providing
Voice: 808-587-4242
the following information:
1-800-222-3229 (Toll-Free)
1. Decedent’s name and identification number;
Telephone for the Hearing Impaired:
2. Amount of tax to be paid in installments;
808-587-1418
1-800-887-8974 (Toll-Free)
3. Date for payment of the first installment;
Fax:
808-587-1488
4. Number of annual installments, including the first installment;
5. Assets listed on the “Computed-Hawaii only” federal estate tax
E-mail: Taxpayer.Services@hawaii.gov
return that constitute the closely held business interest, identi-
fied by reference to both schedule and item numbers; and
Mail:
Taxpayer Services Branch
P.O. Box 259
6. Factual basis for the executor’s conclusion that the estate qual-
Honolulu, HI 96809-0259
ifies for the election.
Definitions —
“Nonresident” means a decedent who was not domiciled in Ha-
Since this election for Hawaii purposes can be made only where
waii at time of death.
no federal estate tax is due, you may make this election even if
not used for federal estate tax purposes. The tax may be paid in
“Nonresident not citizen” means a decedent required to file un-
installments only if the closely held business interests is at least
der subchapter B of chapter 11 of the Internal Revenue Code.
35% of the decedent’s estate. The executor can elect to pay the tax
attributable to such closely held business interest in up to 10 an-
“Resident” means a decedent who was domiciled in Hawaii at
nual installments. Payment must begin no later than the end of the
the time of death.
five-year period from the original due date of the return, with sub-
Special Instructions - For Estates Required to
sequent installment payments due on that same date. Payments
can be spread over two to 10 annual payments. For the first five
File a Hawaii Return but not a Federal Return
years, payment of interest is required. The amount of tax subject
to installment payments is determined by the value of the closely
Act 27, SLH 2018 decoupled the Hawaii applicable exclusion
held business interest for Hawaii estate tax purposes divided by
amount from the federal applicable exclusion amount. Effective for
the value of the Hawaii adjusted gross estate multiplied by the total
decedents dying on or after January 1, 2018, the Hawaii applicable
Hawaii estate tax due. The Hawaii adjusted gross estate is the Ha-
exclusion amount is set at $5,490,000. Consequently, a Hawaii re-
waii gross estate, reduced by the amounts allowable as a deduction
turn may be required even though a federal return is not required.
under IRC section 2053 or 2054.
Since Hawaii estate taxation is derived from federal law, estates of
decedents in this situation must prepare a “dummy” federal estate
There are circumstances which can result in acceleration of the
tax return in order to properly compute their Hawaii estate tax li-
deferred portion of the Hawaii estate tax. The executor must notify
ability. In these cases, a “Computed-Hawaii only” Form 706 must
the Department of all withdrawals and dispositions within 30 days
be completed in the same manner as if a federal estate tax return
of becoming aware of them, and to report each year on whether
was required. Use the amounts as computed on this form where
withdrawals, distributions, and the like have triggered acceleration.
applicable on the Hawaii estate tax return. If you are not filing a
Any liability that has been accelerated must be paid immediately,
federal estate tax return, you may make any elections provided for
notwithstanding the installment payment plan.
under federal estate tax law.
Special Instructions - If Filing a Hawaii Return
Caution: If you are filing a federal estate tax return even
to Claim Portability
though one is not required (i.e., to preserve portability
of the decedent’s unused applicable exclusion amount),
If you are filing a Hawaii estate tax only to preserve portability of
you must make the same elections for Hawaii estate tax
the Deceased Spouse’s Unused Exemption (DSUE), but are not
purposes as the elections made for federal estate tax
filing a federal return, you must prepare a “dummy” federal estate
purposes. You cannot make different elections (other
tax return in order to properly compute the amount of the DSUE
than the election to pay in installments as discussed
for Hawaii estate tax purposes. Prepare a “Hawaii Portability only”
below) for a filed federal estate tax return and a Hawaii
Form 706 in the same manner as if a federal estate tax return
estate tax return, even though a federal estate tax
was required. Use the amounts as computed on this form where
return is not required to be filed. If you previously filed a
applicable on the Hawaii estate tax return. If you are not filing a
Hawaii estate tax return and later filed a federal estate
federal estate tax return, you may make any elections provided for
tax return which has differing elections from the Hawaii
under federal estate tax law.
return, you must amend the Hawaii return to match the
federal elections.
Caution: If you are filing a federal estate tax return to
preserve portability, you must make the same elections
The “Computed Hawaii only” form 706, along with any applicable
for Hawaii estate tax purposes as the elections made
schedules and statements attachments, must be attached to the
for federal estate tax purposes. You cannot make
Hawaii estate tax return. Also, be sure to note “Computed-Hawaii
differing elections.
only” on the top of each of the pages. DO NOT FILE THESE COM-
PUTED FORMS WITH THE IRS. If additional time is needed to file
The “Hawaii Portability only” form 706, along with any applicable
the return, file Form M-68 (Application for Automatic Extension of
schedules and statements attachments, must be attached to the
Time to File Hawaii Estate Tax Return) with the Department.
INSTRUCTIONS
FORM M-6
(REV. 2018)
PAGE 4
Schedule A, Line 11. — Compute the tax for the amount shown on
Hawaii estate tax return. Be sure to note “Hawaii Portability only”
on the top of each of the pages. DO NOT FILE THESE FORMS
line 10 based on the tax rate schedule on page 4 of Form M-6. If
WITH THE IRS.
the amount entered on line 11 is zero, go to Part 2 if the decedent
was married and the surviving spouse will claim the DSUE amount.
Specific Instructions
Schedule A, Line 16. — Skip Schedules B and C and go to Sched-
If you are filing for the estate of a decedent who was a resident of
ule D.
Hawaii and a U.S. resident or citizen on the date of death, complete
SCHEDULE B - NONRESIDENT DECEDENT’S ESTATE
Schedules A and D. If you are filing for the estate of a decedent
who was a nonresident of Hawaii and a U.S. resident or citizen on
Complete United States Estate (and Generation-Skipping
the date of death, complete Schedules B and D. If you are filing for
Transfer) Tax Return (federal Form 706) — The United States
the estate of a decedent who was a nonresident not a citizen of the
Estate (and Generation-Skipping Transfer) Tax Return (federal
U.S., complete Schedules C and D.
Form 706 Revised 8/2017) must be filed with this return for dece-
dents dying after December 31, 2017. Federal Form 706 should be
If you are a personal representative electing to transfer the
completed using federal estate tax law as of December 21, 2017
DSUE amount to the surviving spouse, you must also complete
to arrive at the Hawaii taxable estate. Federal Form 706 (used by
Part 2.
estates of nonresidents of Hawaii but U.S. residents or citizens)
PART 1 - ESTATE TAX COMPUTATION
should be completed through Part 2, line 12. Include any schedules
and federal Forms 712 as required. Identify any Hawaii property.
SCHEDULE A - RESIDENT DECEDENT’S ESTATE
Schedule B, Line 1. — Reciprocity exemption: A nonresident de-
Complete United States Estate (and Generation-Skipping
cedent’s estate is exempt from Hawaii’s estate tax if the nonresi-
Transfer) Tax Return (federal Form 706) — The United States
dent’s state of domicile exempts the property of Hawaii residents
Estate (and Generation-Skipping Transfer) Tax Return (federal
from estate, inheritance, or other death taxes normally imposed by
Form 706 Revised 8/2017) must be filed with this return for dece-
the domicile state. The exemption must be applicable to the dece-
dents dying after December 31, 2017. Federal Form 706 should be
dent based on the date of death and such exemption must spe-
completed using federal estate tax law as of December 21, 2017
cifically reference Hawaii, or must contain a reciprocal provision
to arrive at the Hawaii taxable estate. Federal Form 706 (used by
under which nonresidents of the domicile state are exempted from
estates of residents of Hawaii) should be completed through Part 2,
applicable death taxes with respect to property or transfers which
line 12. Include any schedules and federal Forms 712 as required.
would otherwise be subject to the jurisdiction of that state. The non-
Identify any Hawaii property.
resident decedent must also have been a citizen and resident of the
U.S. at the time of death.
Schedule A, Line 2. — If the amount entered on line 2 is zero, go
to Part 2 if the decedent is married and the surviving spouse will
Entries for property having a situs in Hawaii, Hawaii taxable es-
claim the DSUE amount.
tate, and Hawaii estate tax should all be zero if all of the decedent’s
Hawaii assets are exempt pursuant to the applicable agreement or
Schedule A, Line 4. — For purposes of calculating the value of
statutory provisions. Although there may be no tax due, if the dece-
the gross estate, deductions, and taxable estate, a taxpayer may
dent’s estate is required to file a federal estate tax return, a Hawaii
not make one election for federal estate tax purposes and another
estate tax return must also be filed, setting forth the property in
for Hawaii estate tax purposes with the following exception. If the
Hawaii but with a value of zero. Attach a statement to the Hawaii
decedent was a partner in a civil union or registered domestic part-
estate tax return that refers to the particular agreement or statutory
nership which is recognized in Hawaii for decedents dying after
provisions applicable to the estate and for which the estate is claim-
December 31, 2017 and is survived by their partner, a different
ing its benefits.
election is permitted for Hawaii estate tax purposes. In these cases,
a “Computed-Hawaii only” federal Form 706 must be completed as
Schedule B, Line 2. — If the amount entered on line 2 is zero, go
though the IRC treated a civil union partner as a valid surviving
to Part 2 if the decedent is married and the surviving spouse will
spouse in order to properly compute the Hawaii estate tax liability.
claim the DSUE amount.
Prepare and attach the computed Hawaii only form, along with any
Schedule B, Line 4. — For purposes of calculating the value of
applicable schedules and attach this to the Hawaii estate tax return.
The “Computed-Hawaii only” federal Form 706 should be clearly
the gross estate, deductions, and taxable estate, a taxpayer may
marked “Computed-Hawaii only” on the top of each page. It is not
not make one election for federal estate tax purposes and another
necessary to submit computed schedules or statements if they are
for Hawaii estate tax purposes with the following exception. If the
not different from the actual submitted federal return. DO NOT FILE
decedent was a partner in a civil union or registered domestic part-
THESE COMPUTED FORMS WITH THE IRS. Use the computed
nership which is recognized in Hawaii for decedents dying after
amounts in completing the Hawaii estate tax return where informa-
December 31, 2017 and is survived by their partner, a different
tion is required from the federal estate tax return. Also attach a
election is permitted for Hawaii estate tax purposes. In these cases,
copy of federal Form 706 that was filed with the IRS (including all
a “Computed-Hawaii only” federal Form 706 must be completed as
schedules and statements) when filing the Hawaii return.
though the IRC treated a civil union partner as a valid surviving
spouse in order to properly compute the Hawaii estate tax liability.
Schedule A, Line 8. — If the decedent was a surviving spouse who
Prepare and attach the computed Hawaii only form, along with any
received a DSUE amount from one or more predeceased spouses,
applicable schedules and attach this to the Hawaii estate tax return.
enter the DSUE amount on line 8. If none, enter zero. Enter the
The “Computed-Hawaii only” federal Form 706 should be clearly
name, tax identification number, and date of death of the prede-
marked “Computed-Hawaii only” on the top of each page. It is not
ceased spouse(s) whose unused exclusion amount is claimed as
necessary to submit computed schedules or statements if they are
portable in the space provided. Attach a copy of Form M-6 showing
not different from the actual submitted federal return. DO NOT FILE
the election made by the estate of the predeceased spouse(s).
THESE COMPUTED FORMS WITH THE IRS. Use the computed
amounts in completing the Hawaii estate tax return where informa-
INSTRUCTIONS
FORM M-6
(REV. 2018)
PAGE 5
tion is required from the federal estate tax return. Also attach a
nership which is recognized in Hawaii for decedents dying after
copy of federal Form 706 that was filed with the IRS (including all
December 31, 2017 and is survived by their partner, a different
schedules and statements) when filing the Hawaii return.
election is permitted for Hawaii estate tax purposes. In these cases,
a “Computed-Hawaii only” federal Form 706 must be completed as
Schedule B, Line 10. — If the decedent was a surviving spouse
though the IRC treated a civil union partner as a valid surviving
who received a DSUE amount from one or more predeceased
spouse in order to properly compute the Hawaii estate tax liability.
spouses, enter the DSUE amount on line 10. If none, enter zero.
Prepare and attach the computed Hawaii only form, along with any
Enter the name, tax identification number, and date of death of
applicable schedules and attach this to the Hawaii estate tax return.
the predeceased spouse(s) whose unused exclusion amount is
The “Computed-Hawaii only” federal Form 706 should be clearly
claimed as portable in the space provided. Attach a copy of Form
marked “Computed-Hawaii only” on the top of each page. It is not
M-6 showing the election made by the estate of the predeceased
necessary to submit computed schedules or statements if they are
spouse(s).
not different from the actual submitted federal return. DO NOT FILE
THESE COMPUTED FORMS WITH THE IRS. Use the computed
Schedule B, Line 13. — Compute the tax for the amount shown on
amounts in completing the Hawaii estate tax return where informa-
line 12 based on the tax rate schedule on page 4 of Form M-6. Skip
tion is required from the federal estate tax return. Also attach a
Schedules A and C and go to Schedule D. If the amount entered
copy of federal Form 706 that was filed with the IRS (including all
on line 13 is zero, go to Part 2 if the decedent was married and the
schedules and statements) when filing the Hawaii return.
surviving spouse will claim the DSUE amount.
Schedule C, Line 6. — If the decedent was a citizen of a U.S.
SCHEDULE C - NONRESIDENT ALIEN DECEDENT’S ESTATE
possession or of a country that has a death tax treaty in effect with
Complete United States Estate (and Generation-Skipping
the U.S. such that the unified credit is affected under IRC section
Transfer) Tax Return, Estate of nonresident not a citizen of
2102(b)(3)(A) (which correspondingly increases the applicable ex-
the United States (federal Form 706-NA) — The United States
clusion amount), check the box on line 6 and attach a statement to
Estate (and Generation-Skipping Transfer) Tax Return, Estate of a
the return that refers to the particular treaty applicable to the estate
decedent who was a nonresident not citizen of the U.S. (federal
and for which the estate is claiming its benefits. Use the table (Ex-
Form 706-NA Revised 8/2013) must be filed with this return for
clusion Computation Worksheet for Nonresident Aliens) on Form
decedents dying after December 31, 2017. Federal Form 706-NA
M-6, page 4 to determine the amount to enter on line 6.
should be completed using federal estate tax law as of Decem-
Caution: If the decedent was a citizen of a country that has a death
ber 21, 2017 to arrive at the Hawaii taxable estate. Federal Form
tax treaty with the U.S. that exempts from the U.S. estate tax prop-
706-NA (used by estates of nonresidents not citizens) should be
erty having a U.S. situs, no adjustment is necessary for Hawaii
completed through Part II, line 8. Include any schedules and federal
estate tax purposes since these properties are valued at zero for
Forms 712 as required. Identify any Hawaii property.
federal estate tax purposes. Entries for the gross estate in the U.S.
The transfer of a nonresident not citizen’s property is exempt
and the taxable estate would be zero if all of the decedent’s U.S.
from Hawaii’s Estate and Generation-Skipping Transfer Tax to the
assets are exempt from U.S. estate tax pursuant to the applicable
extent that the property of residents is exempt from taxation under
treaty. Even though no tax may be owed, if the decedent’s estate
the laws of the state in which the nonresident not citizen, is domi-
is required to file a federal estate tax return, a Hawaii estate tax
ciled; except that the following shall be subject to Hawaii’s tax:
return must also be filed. Attach a statement to the Hawaii estate
tax return that refers to the particular treaty applicable to the estate
1. Real property located in Hawaii, whether or not held in a trust
and for which the estate is claiming its benefits.
the corpus of which is included in a decedent’s gross estate for
federal estate tax purposes;
Schedule C, Line 10. — If the decedent was a surviving spouse
who received a DSUE amount from one or more predeceased
2. A beneficial interest in a land trust that owns real property lo-
spouses, enter the DSUE amount on line 10. If none, enter zero.
cated in Hawaii; and
Enter the name, tax identification number, and date of death of
3. Tangible and intangible personal property having a situs in Ha-
the predeceased spouse(s) whose unused exclusion amount is
waii, including:
claimed as portable in the space provided. Attach a copy of Form
a. Shares of stock owned by a nonresident not citizen, if is-
M-6 showing the election made by the estate of the predeceased
sued by a domestic corporation;
spouse(s).
Schedule C, Line 13. — Compute the tax for the amount shown on
b. Any property of which the decedent has made a transfer, by
trust or otherwise, within the meaning of IRC sections 2035
line 12 based on the tax rate schedule on page 4 of Form M-6. Skip
to 2038, inclusive, if situated in Hawaii either at the time of
schedules A and B and go to Schedule D. If the amount entered
the transfer or at the time of the decedent’s death; and
on line 13 is zero, go to Part 2 if the decedent was married and the
surviving spouse will claim the DSUE amount.
c. Debt obligations of a Hawaii person or the state of Hawaii,
PART 2 - PORTABILITY OF THE DSUE ELECTION
or any political subdivision thereof, owned and held by a
nonresident not citizen.
The estate of a decedent with a surviving spouse (including a part-
Schedule C, Line 2. — If the amount entered on line 2 is zero, go
ner in a civil union recognized in Hawaii) may elect portability of
to Part 2 if the decedent was married and the surviving spouse will
the DSUE amount if at the time of death, the decedent was: (1) a
claim the DSUE amount.
resident of Hawaii; (2) a nonresident of Hawaii, but a U.S. resident
or citizen; or (3) a nonresident not citizen but is allowed to claim a
Schedule C, Line 4. — For purposes of calculating the value of
DSUE amount pursuant to a treaty obligation of the United States.
the gross estate, deductions, and taxable estate, a taxpayer may
This election is made by completing and timely-filing this return.
not make one election for federal estate tax purposes and another
To elect portability of the DSUE amount to the surviving spouse,
for Hawaii estate tax purposes with the following exception. If the
decedent was a partner in a civil union or registered domestic part-

Download Instructions for Form M-6 - Hawaii Estate Tax Return

489 times
Rate
4.5(4.5 / 5) 24 votes
ADVERTISEMENT
Page of 6