proper fraction thereof. In the event an obligation of a contractual nature exists in favor of any person, payable at or after the death of the decedent, the sum so payable is treated as a taxable transfer, unless there is evidence to show that a consideration substantially equivalent in value of the amount so due under said contract was paid or furnished by or for the other party thereto during the life of the decedent. The proceeds payable under any life insurance policy, to a designated beneficiary or to the assured's estate, on the death of the assured are taxable as a part of the legacy as distributable shares of the beneficiaries, except that such proceeds payable to a designated beneficiary other than the assured or his estate, not to exceed $10,000 in the aggregate are tax free under this act, and the tax free portion is divided among the beneficiaries in proportion to the proceeds payable to each of the respective beneficiaries. (4281a-15, 4281a-16)

Same. This act applies to any property or interest therein of which the decedent has made a transfer, in trust or otherwise, in contemplation of or intended to take effect in possession or enjoyment at or after death, including a transfer under which the transferor has retained for his life or any period not ending before his death (a) the possession or enjoyment of, or the income from, the property; or (b) the power to designate the persons who shall possess the property or the income therefrom, except in the case of a bona fide sale for an adequate and full consideration in money or money's worth; or (c) to any property conveyed in trust over which the settlor has a power of revocation exercisable by will. (4281a-17)

Additional estate tax. In addition to the inheritance tax imposed by this act, an estate tax is levied on all estates, and which is equal to the amount by which the credits for State death taxes allowable under the Federal estate tax law 2 exceeds the tax levied under this act. This estate tax is payable at the same time and in the same manner as are the inheritance taxes levied by this act. In the case of resident and nonresident decedents over part of whose estates Kentucky has tax jurisdiction, the estate tax is computed as follows: (a) The ratio which that part of the estate over which Kentucky has jurisdiction for tax purposes bears to the total estate wherever located is ascertained; (b) the total maximum offset for State succession taxes allowable under the Federal law is multiplied by the ascertained ratio to determine the offset allocable to this State; (c) the estate tax levied hereunder equals the amount, if any, by which the offset allocable to this State exceeds the inheritance taxes levied under this act. (4281a-28)

Deductions allowed. In calculating the value of the distributive shares, the following deductions are allowed: Debts of the decedent, except those secured by property not subject to the tax jurisdiction of this State; taxes accrued and unpaid, except those on property not subject to said jurisdiction; death duties paid to foreign countries; Federal estate taxes, in the proportion which the property assessed in this State bears to the total taxable property of the estate; drainage, street or other special assessments which are a lien on said property; funeral and burial expenses not exceeding $600, and not exceeding $1,000 actually expended for monuments; commissions of executors and administrators; and cost of administration. A deduction is allowed to persons of class A for all property transferred by a decedent

? The provisions of law relating to this tax are shown on p. 7.

of class A to any person of that class, in the event the same property had been transferred within 2 years to such decedent and a tax paid thereon to this State; but this deduction does not apply to one who becomes a member of class A by marriage contracted within said. period of 2 years. (4281a-22)

Exemptions. All transfers to educational, religious, or charitable institutions, societies, or associations, and all transfers for or upon trust for any charitable purpose in this State, and all transfers to cities and towns or public institutions in this State for public purposes are exempt from this tax. Beneficiaries are entitled to the following exemptions: Wife or infant child, $10,000, but if the transfer exceeds $30,000, the exemption is decreased by subtracting from $10,000 the amount by which the distributable share exceeds $30,000, so that a distributable share greater than $40,000 shall receive no exemption; all other persons of class A, $5,000, but if the transfer to any other person of class A exceeds $15,000, the exemption is decreased by subtracting from $5,000 the amount by which the distributive shareexceeds $15,000, so that a distributive share greater than $20,000 shall receive no exemption. (4281a-18 and 20)

Same. If the decedent be not a resident of this State, the exemption is the same proportion of the allowable exemption in the case of residents that the property taxable by Kentucky bears to the whole property transferred by decedent. In calculating the tax upon each share, all exemptions are in each case taken out of the first $10,000 inherited, and the tax on the remainder, if any, of the first $10,000 is computed at the rates hereinafter shown. (4281a-20)

Classification of beneficiaries.-The beneficiaries under this act are classified as follows: Class A: Surviving spouse, child by blood, stepchild, child adopted during infancy, and grandchild (if issue of a deceased child). Class B: Parent, brother or sister of the whole or half blood, nephew, niece, daughter-in-law, son-in-law, and grandchild (if issue of a living child). Class C: All other persons or corporations not exempted. (4281a-19)

Rates of tax. The tax upon the taxable transfers is at the following rates: (4281a–19)

Shares of stock of foreigners.-All shares of stock in domestic corporations belonging to persons domiciled in a foreign country are, on the death of the owner, subject to a tax of 5 percent of their actual

values upon transfer, payment, or delivery to the personal representative of the estate of the decedent. (4281a-32)

Filing returns. Every executor and administrator is required, when filing his inventory in the county court, to file a duplicate thereof with the department of revenue, which assesses the tax on the full and fair cash value of the property transferred. (4281a-33, 4281a–36) Payment of tax; discounts; interest.-All taxes imposed by this act, unless otherwise provided for, are payable to the department of revenue upon the death of the decedent; if paid within 9 months, a discount of 5 percent is allowed; if paid within 18 months, no interest is charged; but if not paid within 18 months, a penalty is charged at the rate of 10 percent per annum from the time the taxes accrued. Said penalty, however, may be waived in case an estate cannot be settled in 18 months, in which event only 6 percent per annum is charged from the expiration of 18 months until the cause of delay is removed. (4281a-36, 4281a-41, 4281a-42)

Tax lien. The taxes imposed by this act remain a lien upon the property transferred and upon all property acquired by the personal representative until payment thereof or a bond is given; but said lien does not affect any tangible or intangible personal property after it has passed to a bona fide purchaser for value; but this does not give the owner of any securities the right to have the same transferred to him by the issuer until a permit required has been issued. (4281a-36)

Disposition of proceeds. The proceeds of this tax are covered into the State treasury to the credit of the general expenditure fund. (4281a-36, 4281a-54)

Administration of act.-The department of revenue has full supervision of the enforcement and collection of all taxes due under the provisions of this act. (4281a-33)

Source of information. Baldwin's 1936 Revision of Carroll's Kentucky Statutes.

LOUISIANA

INHERITANCE AND ESTATE TAXES

Tax imposed. A tax is imposed upon all inheritances, legacies, and donations and gifts made in contemplation of death, except those specifically exempted. (8556)

Transfers taxable. This tax is imposed with respect to all property of every nature and kind included or embraced in any inheritance, legacy, or donation or gift made in contemplation of death, including all personal property physically in this State, whether owned or inherited by, or bequeathed, given or donated to a resident or nonresident, and whether inherited, bequeathed, given or donated to, under the law of this State or of any other State or country; and all personal property owned by residents of this State, wherever situated unless such property is included in the exemptions hereinafter set forth. In the event that any real estate is included in the estate of the decedent and is bona fide mortgaged in an amount in excess of 50 percent of its value, in computing the equity of value of such estate for the purposes of assessing an inheritance tax, the apparent margin between the appraised value of realty and the mortgage encumbrance therein is reduced by an amount equal to 20 percent of such encumbrance. (8557)

Additional estate tax.-In addition to the inheritance tax, an estate transfer tax is levied upon estates which are subject to taxation under the Federal estate tax act. Whenever the aggregate amount of all inheritance, succession, legacy, and estate taxes actually paid to the several States of the United States in respect to any property owned by such decedent shall be less than 80 percent of the estate tax payable to the United States under said Federal act, the difference between said amount and said 80 percent is payable to this State. The provisions of the inheritance tax law, insofar as applicable, regulate the proceedings to fix the amount of this tax, and the manner in which it shall be collected. It is the intent and purpose of the provisions. of this paragraph to obtain for this State the benefit of the credit allowed under said Federal act. (8581-84)

Exemptions.-The beneficiaries under this inheritance tax act are allowed the following exemptions: Class A, $5,000; class B, $1,000; class C, $500. All legacies and donations to charitable, religious, or educational institutions located within this State are exempt from this tax. (8556)

Classification of beneficiaries.-The beneficiaries under this act are classified as follows: Class A: Direct descendant, by blood or affinity, ascendant, or surviving spouse of decedent. Class B: Collateral relations (including brothers or sisters by affinity). Class C: All others. (8557)

Rates of tax.-Beneficiaries of class A pay 2 percent of the actual value of all amounts in excess of $5,000 up to $20,000, and 3 percent

The provisions of law relating to this tax are shown on p. 7.

on amounts in excess of $20,000. Class B beneficiaries pay 5 percent on amounts in excess of $1,000 up to $20,000 and 7 percent on amounts in excess of $20,000. Class C beneficiaries pay 5 percent on amounts in excess of $500 up to $5,000, and 10 percent on amounts in excess of $5,000. (8557)

Payment of tax; interest. This tax is payable to the sheriff and ex officio tax collector of the parish in which was the last residence of the decedent, or in which is situated property of a nonresident decedent, except in the parish of Orleans, where it is payable to the clerk of the civil district court. The taxes so levied bear interest at the rate of 1 percent per month beginning 6 months after the death of the decedent and 2 percent per month, beginning 12 months after the death of the decedent; but saving to any heir, legatee, or donee the right to stop the running of interest against him by paying the amount with accrued interest, estimated or ascertained, or by tendering the same to the tax collector. In cases where the settlement of the succession is bona fide contested the interest is remitted, so also when it is shown to the satisfaction of the tax collector that the beneficiary was ignorant of the inheritance. (8576, 8579)

Disposition of proceeds.-The proceeds of this tax are for the use of the State.

Source of information.-Chapter 20, Volume 3, Louisiana General Statutes, Annotated, 1932.