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August 2009 Inheritance Tax Advisory
Form IT-1, Inheritance Tax Return. The 2009 revision of the Oregon Inheritance Tax return will be available online in September 2009.  

2009 Amnesty, Senate Bill 880

The 2009 Oregon Legislature passed Senate Bill 880 and it has been signed by the governor. This bill directs the Oregon Department of Revenue to conduct a tax amnesty program.
Amnesty will be available for any inheritance tax return which had an original due date prior to January 1, 2008. 

Natural Resource and Fishing Business Property Credit

The Oregon Natural Resource and Fishing Business Property credit is available for deaths on or after January 1, 2007. The 2008 House Bill 3618 amends ORS 118.140 and allows the credit. See our Form IT-1 instructions for line 18 and use the Oregon Schedule NRC when claiming the credit.

Transfers of property within three years before death

In the 2006 Oregon Inheritance Tax Return instructions (Rev. 8-06) for gross estate (page 1, left column), we stated the gross estate includes “...all transfers of property made by the decedent within the three-year period ending on the date of death.”
 
We based our position on Oregon Revised Statute (ORS) 118.160(2) and Oregon Administrative Rule (OAR) 150-118.005(2)(f). In summary, OAR 150-118.005(2)(f) provides that the gross taxable estate includes... gifts made within the three-year period ending on the date of death.
 
We revisited our position on the three-year gifts issue and determined that the rule does not reflect the provisions of ORS 118.007, which connects the Oregon determination of the gross estate to the Internal Revenue Code as it existed on December 31, 2000. Instead, the rule reflects a connection to prior federal law, which did require inclusion of gifts within three years of death in an estate for federal tax purposes. We are removing this requirement from our instructions, eliminating inclusion of the three-year gifts in the gross estate. We will revise OAR 150-118.005 and update you on our progress.
 

Connection to the Internal Revenue Code (IRC)

Oregon inheritance tax law is tied to federal estate tax law as of December 31, 2000.
  • Compute tentative tax on taxable estate using Table A.
  • Compute Oregon Inheritance Tax using Table B.
 
Oregon inheritance tax is 100 percent of the state death tax credit allowed by 2000 federal law, not the reduced amount as allowed on the 2002-2004 federal estate return (Form 706).
 
As of 2005, the federal estate tax law allows the state death tax as a deduction on Form 706. Oregon does not allow the calculation of taxable estate after the state death tax deduction.
 

Consent to Transfer Stock

Have you been asked to obtain a consent to transfer stock or a stock waiver certificate from the Department of Revenue? If the date of death is 1987 or later, it is no longer necessary to obtain the department's consent to transfer stocks, bonds, and mutual funds owned by decedents whose deaths occurred on or after January 1, 1987. The repeal of Oregon Revised Statute 118.230 went into effect on September 27, 1987. Therefore, the department does not have jurisdiction to provide a release of any of the above-mentioned assets for deaths in 1987 and later.

If the date of death was before 1987, please contact the department for the application for consent to transfer stock. You may e-mail your request.
 
 
Forms and instructions
 
Contact us with questions about inheritance tax.