Pennsylvania Schedule M - Future Interest Compromise (Instructions)

Schedule M - Future Interest Compromise (Instructions)
Instructions for REV-1647 Schedule M - Future Interest Compromise
Instructions for REV-1647 Schedule M
Future Interest Compromise

REV-1647 EX (02-15)

GENERAL INFORMATION
PURPOSE OF SCHEDULE
Use REV-1647 Schedule M to report all
future interests where the rate of tax
which will be applicable when the
future interest vests in possession and
enjoyment cannot be established with
certainty.

FORM INSTRUCTIONS
Estate of
Enter the complete name of the estate
as shown on REV-1500, Pennsylvania
Inheritance Tax Return.

File Number
Enter the file number of the estate assigned by the Register of Wills as
shown on REV-1500, Pennsylvania Inheritance Tax Return.

GENERAL INSTRUCTIONS
IMPORTANT: This schedule is
appropriate only for estates of
decedent dying on or after Dec. 13,
1982.

I. Beneficiaries
List the name, relationship, date of
birth and age to nearest birthday
of each beneficiary indicated in the
instrument which created the future
interest compromise.

II. Right of Withdrawal
For decedents dying on or after July 1,
1994, if a surviving spouse exercised
or intends to exercise a right of withdrawal within nine months of the decedent’s death, check the appropriate
block.

www.revenue.pa.gov

III. Explanation of
Compromise Offer
Section 9116(e) of the Inheritance and
Estate Tax Act of 1991 [72 P.S. §
9116(e)] effective Oct. 3, 1991 authorizes the Department of Revenue to
compromise the amount of tax payable
on a future interest when the rate
of tax cannot be established with
certainty.
NOTE: This schedule is applicable only if a contingency makes
it impossible on the date of death of a
decedent to determine the rate of tax
which will apply when a future interest
vests in possession and enjoyment.
A compromise request is not necessary
if all potential beneficiaries are taxable
at the same rate, and the only uncertainty is the identity of the ultimate
beneficiary of a future interest.
REV-1647, Schedule M must accompany the return if a compromise determination is requested. All information
having a direct or indirect effect on the
compromise portion of the estate
should be presented with the return.
The estate is encouraged to provide
any information that is deemed to
have an impact on the possible future
benefit to the respective beneficiaries
so that the department may make
informed judgments. This may include,
but would not be limited to: the health
and lifestyle of the respective beneficiaries, individual wealth of the beneficiary, average expenses, expected
income, etc. The estate’s compromise
offer should be supported by as much
factual data and explanatory information as possible.
The Department of Revenue will review
the information presented to deter-

mine if a compromise determination
is appropriate and to evaluate the
suggested compromise tax amount
submitted by the taxpayer. The department’s review may be based on actuarial computation, subjective analysis,
or a combination of both. If the facts
presented on REV-1647, Schedule M
do not reveal any extraordinary circumstances, the determination of the
department will be made by an actuarial
formula without any subjective review.
NOTE: If a contingency makes it
impossible on the date of death
to determine the rate of tax which will
apply when a future interest vests and
a compromise determination is not
requested by the taxpayer, the department will assess tax at the highest
rates which would apply at all points of
uncertainty in the chain of distribution.
NOTE: To request a compromise
determination, the person responsible for filing the return must fill
in oval 5 “Future Interest Compromise”
of REV-1500.
The Inheritance Tax Division, upon
written request, will provide the probability factor in the case of an actual
decedent prior to the filing of the tax
return. Inquiries should be addressed
to:
PA DEPARTMENT OF REVENUE
BUREAU OF INDIVIDUAL TAXES
INHERITANCE TAX DIVISION
PO BOX 280601
HARRISBURG, PA 17128-0601
The request for a probability factor
must identify the estate, date of death,
file number, and must be accompanied
by a copy of any relevant instrument.

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