In the case of the estate of a resident transferor, the net estate for the purposes of the tax imposed by the provisions of this chapter shall be ascertained by deducting from the gross taxable estate the following items: (a) Debts of the transferor which constitute lawful claims against his estate; (b) unpaid taxes, (1) on real property within this state which were a lien at the date of the transferor's death, (2) on personal property of the transferor which constituted a personal obligation or were a lien at the date of death, (3) on the income of the transferor accrued to the date of death; (c) any tax on untaxed property assessed by this state against the estate of the transferor; (d) special assessments which, at the date of death, were a lien on the real property of the transferor situated within this state; (e) funeral expenses and all amounts actually expended or to be expended for a headstone or monument or the care of any cemetery lot; (f) reasonable compensation of executors and administrators and reasonable attorney's fees; (g) a reasonable allowance made during the settlement of the estate for the support of the widow, widower, dependent minor children, including legally adopted children, of the transferor, or dependent children incapable of self-support because mentally or physically defective receiving support mainly from the transferor at the time of his death; but no such deduction shall be made for any such allowance beyond the expiration of twelve months after the date of the transferor's death; (h) the amount at the date of the transferor's death of all unpaid mortgages upon real or personal property situated within this state, which mortgages were not deducted in the appraisal of the property mortgaged; (i) reasonable expenses of administration, including those relating to property transferred other than by will or laws relating to intestate estates, except as provided in section 12-351; (j) in the case of a transfer other than by will, liens subject to which the transfer is made, unpaid expenses of administering a trust prior to death, which trust is taxable under the provisions of this chapter, and expenses of terminating such trust if it terminates on the death of the transferor; (k) any amount exempted pursuant to subsection (b) of section 12-344. The foregoing deductions shall be allowed in the case of property transferred by will and by laws relating to intestate estates, provided they reduce the gross taxable estate. In the case of property transferred other than by will or by laws relating to intestate estates, such deductions shall be allowed (1) only to the extent that such property is includable in the decedent's gross taxable estate under the provisions of this chapter, and (2) only to the extent that the transferee has actually paid the deductible items and either the transferee was legally obligated to pay such items or the assets subject to probate are insufficient to pay such items.

(1949 Rev., S. 2030; 1949, S. 1140d; 1969, P.A. 243, S. 1; 524, S. 1; 1971, P.A. 863, S. 1; 1972, P.A. 265, S. 1; P.A. 83-520, S. 10, 13; P.A. 88-310, S. 1, 2.)

History: 1969 acts made deductions applicable to joint bank accounts and provided exceptions relating to joint bank accounts, specified that deductions allowed only if they reduce gross taxable estate, substituted “a reasonable allowance” for “any allowance” in Subdiv. (h), specified “reasonable” expenses in Subdiv. (j) and included as deduction for transfers other than by will or laws governing intestate estates and joint bank account a deduction for expenses set forth relating to trusts, effective July 1, 1969, and applicable to estates of persons dying on or after that date (all estates of persons dying before July 1, 1969, are subject to succession or inheritance tax laws applicable before that date and continued in force for that purpose); 1971 act included as deductions for transfers other than by will, laws governing intestate estates and joint bank accounts, deductions for probate fees, appraisers' fees, and expenses relating to administrator if one appointed, effective January 1, 1972, and applicable to estates of persons dying on or after that date (all estates of persons dying before January 1, 1972, are subject to succession or inheritance tax laws applicable before that date and continued in force for that purpose); 1972 act deleted Subdiv. (b) re losses incurred up to time of filing return “in the reduction to possession of choses in action, including notes and mortgages, but not including corporate or governmental stocks or bonds nor including income accrued after death”, effective May 18, 1972, but retroactive to January 1, 1972, and applicable to estates of persons dying on or after that date (all estates of persons dying before January 1, 1972, are subject to succession tax laws applicable before that date and continued in force for that purpose); P.A. 83-520 included expenses relating to property transferred other than by will or laws of intestacy as reasonable expenses of administration under Subsec. (i), permitted deduction, in the case of transfer other than by will, of liens subject to which transfer is made, unpaid expenses of administration of taxable trust prior to death and expenses of terminating such trust if it terminates on death of transferor, deleted former provisions re extent to which deductions shall be allowed and substituted provision that such deductions shall be allowed to the extent that the transferee has actually paid deductible items and either the transferee was legally obligated to pay or assets subject to probate are insufficient to pay, and made technical changes, effective July 7, 1983, and applicable to estates of decedents dying on or after such date; P.A. 88-310 added Subdiv. (k) deducting from gross taxable estate amounts exempted pursuant to Subsec. (b) of Sec. 12-344.

Federal estate tax is not to be deducted in determining the net taxable estate. 141 C. 257. Cited. 209 C. 429; 215 C. 633.

Expenses of last illness and funeral are not deductible from the nonprobate portion of an estate, in this case a joint bank account, except as they may constitute liens thereon or debts which it is judicially established are chargeable thereto; such liens or debts are not created by Sec. 36-3a. 25 CS 250. Cited. 40 CS 484; 44 CS 263; Id., 421.

Subdiv. (a):

When an insurance company makes a loan to its insured against a policy on his life, the transaction does not create a true debt; but where the insured borrows from a bank on his own note and pledges his insurance as collateral security, a debt is created. 142 C. 529.

Subdiv. (h):

“Reduce the gross taxable estate” not intended to restrict the number of deductions allowable for state succession tax purposes. 210 C. 277.