FAILED 4/22/2005

601

6096.E AMH .... PETE 018

ESB 6096 - H AMD

By Representative ____________

         On page 3, line 24, strike "section 4" and insert "section 4 or 5"

   One page 4, line 28, strike "section 4" and insert "section 4 or 5"

   On page 9, after line 27, insert the following:

   "NEW SECTION. Sec. 5. A new section is added to chapter 83.100 RCW to read as follows:

     (1) For the purposes of determining the Washington taxable estate, a deduction is allowed from the federal taxable estate for the value of qualified family-owned business interests of the decedent. This deduction applies only if the qualified family-owned business interest is acquired by any qualified heir from, or passed to any qualified heir from, the decedent, within the meaning of section 4(2) of this act and the decedent was at the time of his or her death a citizen or resident of the United States. Only property in the federal taxable estate and not deductible under section 4 of this act may be deducted under this subsection. For the purposes of determining the deduction amount, the value of property is its value as used to determine the value of the gross estate. For purposes of this subsection, the following definitions apply:

   (i) "Qualified family-owned business interest" has the same meaning as in section 2057(e) of the Internal Revenue Code."

   (ii) “Qualified heir” has the same meaning as in section 2057(i) of the Internal Revenue Code."

   Renumber the sections consecutively and correct any internal references accordingly.

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EFFECT: Allows an estate tax deduction for the value family-owned business interest left to a family member or an long term active employee of the business.