MARVIN MANDEL, Governor                      1799

far as Executors, Administrators, the Registers of Wills, the dis-
tributees, and the Comptroller's Office are concerned.

When the Income Tax Law was amended two years ago to pro-
vide for the use of the Federal adjusted gross income base, the pro-
visions exempting income received by an Executor or Administrator
were eliminated from the Maryland Law. Under certain conditions
such income is subject to the Federal income tax, and consequently
is subject also to Maryland income tax. This poses no particular
problem insofar as the Executor's dealings with the Federal Govern-
ment are concerned, since he is responsible not merely for paying
the Federal income tax but also for filing the Federal Estate Tax Re-
turn. Estate Taxes are, of course, levied on the value passing under
probate; whereas, the Maryland Inheritance Tax is levied on the
amount received by the distributee.

This Bill would place the onus on an Executor or Administrator
to determine whether or not the amount of income being distributed
would be taxable to each distributee. This information would be
most difficult to ascertain since it would require the Executor or
Administrator to make inquiries as to the personal status of the
distributee, which is otherwise of no concern to him.

Each Register of Wills would be required to obtain a statement
from an Executor or Administrator as to that portion of each amount
being distributed which constituted income as opposed to corpus,
and which was subject to the payment of Maryland income tax. No
Register of Wills would have any means of verifying such a state-
ment at the time Inheritance Taxes were payable.

The Income Tax Division of the Comptroller's Office would have
no knowledge of any such transactions since Section 279 of Article
81 (f) of the Code excludes from the definition of a fiduciary Execu-
tors or Administrators and consequently they are not required to
file any reports with this office. The Comptroller's Office would be
unable, at the time the Inheritance Tax was due, to ascertain
whether or not income tax was payable on the amount of income
distributed by the Executor or Administrator.

For these reasons we believe that this legislation should be sub-
jected to study by the Legislative Council before becoming law.

With kindest personal regards and best wishes, I am

Very sincerely yours,
/s/ Louis L. Goldstein,

Comptroller.

Letter from Delegate John A. Whitney—H.B. 506.

Honorable Marvin Mandel
Governor of Maryland
Annapolis, Maryland 21404

RE: House Bill 506
My Dear Governor:

This bill is designed to eliminate the double taxation of income
received by the estate of a decedent during administration. It was