New York Estate Tax Claw-back of Gifts Made within Three Years of Death
New York State has an estate tax on the transfer of property at death.
New York State does not have a gift tax. But, since April 1, 2014, gifts made by N.Y. residents, within three years of death are "clawed back" (that is, they are brought back into the New York taxable estate and subjected to New York State estate tax).
The purpose of the claw-back is to prevent the making of gifts, shortly before death, as a device to avoid New York State estate tax.
The rule was originally set to expire on January 1, 2019, but on April 12, 2019, New York extended the claw-back to gifts made through December 31, 2025.
The claw back does not apply to gifts made before April 1, 2014 or to gifts made at a time the decedent was not a N.Y. resident. Also, the claw back does not apply to gifts made of real or tangible property located outside of New York. (Due to a legislative quirk the rule does not apply to gifts made between January 1, 2019, and January 15, 2019).
See also: New Yorkers are Falling off a Cliff
Robert Adler, Esq. is an attorney who focuses his practice on wills, trusts and estates. He can be reached at 212-843-4059 or 646-946-8327.