The following information provides a general explanation of qualified terminable interest property (QTIP).
If electing or reporting qualified terminable interest property:
- Complete the Washington State Estate Tax Addendum # 1 – Qualified Terminable Interest Property or Qualified Domestic Trust form.
- Attach to the Washington State Estate and Transfer Tax Return.
Qualified terminable interest property
QTIP property must meet all of the following conditions:
- Passes from the decedent.
- The surviving spouse has a qualifying income interest for life.
- A QTIP election is allowed and elected.
The surviving spouse has a qualifying income interest for life if all of the following conditions exist:
- The surviving spouse is entitled to all the income from the property, payable annually or at more frequent intervals, or has a right to use and enjoy an interest for life in the property.
- No person has a power to appoint any part of the property to any person other than the surviving spouse.
The term “property” includes an interest in property.
Qualified terminable interest property election
The QTIP election:
- Can be made on the last estate tax return filed by the executor, on or before the due date of the return. This includes extensions, or, if a timely return is not filed, the first estate tax return filed by the executor after the due date.
- Is irrevocable, once made. The election may only be revoked or modified on a subsequent estate tax return filed on or before the due date of the return, including extensions actually granted.
For additional information, see RCW 83.100.047.
Send us your question or call 360-704-5906, option 1, to speak with an estate tax examiner.