T. Kimball Brooker v. Madigan

State: Illinois

Court: 1st District Appellate

Docket No: 1-07-1876 Rel

Case Date: 02/17/2009

Preview:FIRST DIVISION February 17, 2009

No. 1-07-1876 T. KIMBALL BROOKER, as Executor of the Estate of Nancy Neumann Brooker, Plaintiff-Appellee, v. LISA MADIGAN, in her official capacity as Attorney General of the State of Illinois, and ALEXI GIANNOULIAS, as Treasurer of the State of Illinois, Defendants-Appellants (Maria Pappas, in her official capacity as Treasurer of Cook County, Illinois, Defendant). ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Appeal from the Circuit Court of Cook County.

No. 05 CO IT 000001

The Honorable Paul A. Karkula, Judge Presiding.

JUSTICE GARCIA delivered the opinion of the court. This appeal questions whether the estate of Nancy Neumann Brooker, valued at more than $68 million, is liable to the State of Illinois for $3,530,949.32 in estate "death" taxes. The

answer hinges on the interpretation of the 2003 amendment to the Illinois Estate and Generation-Skipping Transfer Tax Act that defines "State tax credit" at the time of Ms. Brooker's death as "an amount equal to the full credit calculable under Section 2011

1-07-1876 *** of the Internal Revenue Code as the credit would have been computed and allowed under the Internal Revenue Code as in effect on December 31, 2001." 2004). (Emphasis added.) 35 ILCS 405/2(a) (West

The circuit court accepted the estate's position that

because it did not claim a credit on its federal tax return, no estate tax is due under the Illinois Estate and GenerationSkipping Transfer Tax Act. We conclude that whether Illinois estate taxes are due does not turn on whether the estate chooses to claim a "credit for State death taxes" under section 2011 on its federal tax filing. Rather, Illinois estate taxes are due on every taxable transfer within the State of Illinois in the amount of "the credit [that] would have been computed and allowed" as provided by the 2003 amendment, whether or not a credit is claimed on the estate's federal tax filing. Accordingly, we reverse and remand. BACKGROUND As the backdrop to our analysis, we begin with the interplay between the Illinois and federal estate taxation systems. then examine the Federal Economic Growth and Tax Relief Reconciliation Act of 2001 (26 U.S.C.

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