New Mexico Administrative Code
Title 3 - TAXATION
Chapter 8 - ESTATE TAX
Part 3 - CREDIT FOR TAX PAID TO OTHER STATE
Section 3.8.3.8 - CALCULATION OF CREDIT FOR TAX PAID OTHER STATE; EXAMPLES
Current through Register Vol. 35, No. 6, March 26, 2024
A. The following examples illustrate the application of Section 7-7-3 NMSA 1978. The federal credit in each case is determined by reference to federal law. All other figures are hypothetical.
B. Example 1: T is a New Mexico decedent. T's gross estate is $1,750,000; T has $140,000 in deductions. Thus the taxable estate is $1,610,000. $175,000 of T's estate is real property located in state X, where it is taxed. State X does not have a reciprocal provision allowing this amount to be taxed in New Mexico.
$71,520 x 175,000 = $7,152
1,750,000
C. Example 2: Same facts as in Example 1, except $1,400,000 of T's gross estate is real property located in and taxed by state X. Method 1 results in $61,840 credit. Method 2 results in $57,216 credit ($71,520 x 8/10). The amount credited against New Mexico tax due is $57,216, because the amount in this case is less using method 2.