N.Y. Tax Law 975 – Liability for tax
§ 975. Liability for tax. (a) Duty of executor to pay tax. (1) The tax imposed by this article shall be paid by the executor, who shall thereupon charge the same against and collect it from the persons interested in the estate in accordance with the rules of apportionment of section 2-1.8 and other relevant provisions of the estates, powers and trusts law.
Terms Used In N.Y. Tax Law 975
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Decedent: A deceased person.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- executor: means the executor or administrator of the estate of the decedent, or, if there is no executor or administrator appointed, qualified and acting, then any person or entity in actual or constructive possession of any property of the decedent. See N.Y. Tax Law 951-A
- Executor: A male person named in a will to carry out the decedent
- Gross estate: The total fair market value of all property and property interests, real and personal, tangible and intangible, of which a decedent had beneficial ownership at the time of death before subtractions for deductions, debts, administrative expenses, and casualty losses suffered during estate administration.
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgagee: The person to whom property is mortgaged and who has loaned the money.
- person: includes an individual, a trustee, a corporation, an association, a joint-stock company, a partnership, a limited liability company and a bank. See N.Y. Tax Law 951-A
- Personal property: All property that is not real property.
- persons interested in the estate: shall include all persons who may be entitled to receive or who have received any property or interest which is required to be included in the gross estate of a decedent, or any benefit whatsoever with respect to any such property or interest, whether under a will, or intestacy, or by reason of any of the transfers, trusts, estates, interests, rights, powers and relinquishments of powers which are required to be included in the gross estate. See N.Y. Tax Law 951-A
- tangible personal property: means corporeal personal property, including money held for numismatic purposes, and does not include deposits in banks, mortgages, debts, receivables, shares of stock, bonds, notes, credits, evidences of an interest in property, evidences of debt, or choses in action generally. See N.Y. Tax Law 951-A
- Trustee: A person or institution holding and administering property in trust.
(2) If the tax imposed by this article, or any part thereof, is paid by, or collected out of, that part of the estate passing to or in the possession of any person other than the executor in his capacity as such, such person shall be entitled to reimbursement out of any part of the estate still undistributed or by a just and equitable contribution by the persons whose interest in the estate of the decedent would have been reduced if the tax had been paid before the distribution of the estate or whose interest is subject to equal or prior liability for the payment of taxes, debts or other charges against the estate, it being the purpose and intent of this section that so far as is practicable and unless otherwise directed by the will or non-testamentary instrument of the decedent, the tax shall be paid out of the estate before its distribution.
(b) Liability of executor. An executor who pays, in whole or in part, any debt due by the estate for which he or she acts, except for a debt owed to the United States or to New York state, or who distributes any asset of the estate, prior to the payment in full of the tax imposed by this article, shall be answerable in his or her own person and estate for the payment of such tax to the extent that the assets of the estate have been so paid out or distributed. The liability of the executor under this subsection shall continue until his or her discharge as provided in section nine hundred eighty-one of this article.
(c) Liability of life insurance beneficiaries. Unless the decedent directs otherwise in his or her will, if any part of the New York gross estate on which tax has been paid consists of proceeds of policies of insurance on the life of the decedent receivable by a beneficiary other than the executor, the executor shall be entitled to recover from such beneficiary such portion of the total tax paid as the proceeds of such policies bear to the federal taxable estate, reduced by the value of any real or tangible personal property located outside New York state, and increased by any federal estate tax deductions attributable to such property. If there is more than one such beneficiary, the executor shall be entitled to recover from such beneficiaries in the same ratio. In the case of such proceeds receivable by the surviving spouse of the decedent for which a deduction is allowed under section two thousand fifty-six of the internal revenue code (relating to marital deduction), this section shall not apply to such proceeds.
(d) Liability of recipients of property over which decedent had power of appointment. Unless the decedent directs otherwise in his or her will, if any part of the New York gross estate on which the tax has been paid consists of the value of property included in the gross estate under section two thousand forty-one of the internal revenue code, the executor shall be entitled to recover from the person receiving such property by reason of the exercise, nonexercise, or release of a power of appointment such portion of the total tax paid as the value of such property bears to the federal taxable estate, reduced by the value of any real or tangible personal property located outside New York state, and increased by any federal estate tax deductions attributable to such property. If there is more than one such person, the executor shall be entitled to recover from such persons in the same ratio. In the case of such property received by the surviving spouse of the decedent for which a deduction is allowed under section two thousand fifty-six of the internal revenue code (relating to marital deduction), this section shall not apply to such property.
(e) Liability of transferees and others. If the tax imposed by this article is not paid when due, then the spouse, transferee, trustee, surviving tenant, person in possession of the property by reason of the exercise, nonexercise, or release of a power of appointment, or beneficiary, who receives, or has on the date of the decedent's death, property included in the New York gross estate to the extent of the value, at the time of the decedent's death, of such property, shall be personally liable for such tax. Any part of such property transferred by (or transferred by a transferee of) such spouse, transferee, trustee, surviving tenant, person in possession of property by reason of the exercise, nonexercise, or release of a power of appointment, or beneficiary, to a bona fide purchaser, mortgagee, or pledgee, for an adequate and full consideration in money or money's worth shall be divested of the lien provided in section nine hundred eighty-two of this article and a like lien shall then attach to all the property of such spouse, transferee, trustee, surviving tenant, person in possession, beneficiary, or transferee of any such person, except any part transferred to a bona fide purchaser, mortgagee, or pledgee for an adequate and full consideration in money or money's worth. Provided, however, where any interest in such property was held by the decedent and the decedent's surviving spouse as tenants by the entirety, such interest in such property shall be divested of the lien provided in section nine hundred eighty-two of this article.