Oregon Inheritance Tax Rules
Oregon, like many other states, charges an inheritance tax. This tax is imposed on heirs and beneficiaries of property transfers from a deceased person’s estate.
As is often the case with state inheritance laws, there are a number of intricacies and details that go into deciphering, interpreting and following through on the law.
Tax Rates
According to Oregon state law, the inheritance tax is applied with a deceased person’s estate has a taxable value of greater than $1 million. The state’s inheritance tax rates vary anywhere from 0.8 to 16 percent, a percentage that is determined by the exact value of the estate.
Taxable Property
Whether property is subjected to Oregon inheritance tax laws is based in part on whether the deceased person was a resident of Oregon. If so, all property located in the state (or intangible property located anywhere) is taxed, taking into the account the $1 million tax exemption.
If real (tangible) property is located outside the state, it is not taxed. Property that falls under the umbrellas of taxable property under Oregon inheritance tax law includes real estate, cash, stocks, bonds, mortgages, insurance, powers of appointment and annuities.
Deductions
Like most tax-related programs, there are some deductions available under Oregon inheritance tax. These deductions can be claimed in determining net value of all estate, and include debts of the deceased person, funeral costs, charitable donations, certain family-owned businesses and costs of administering estate property.
Filing
Under Oregon state law, the inheritance tax return should be filed by the executor of the deceased person’s estate.
There is a 5 percent penalty levied for those not filing by the due date, typically nine months from the date of death, while a 20 percent penalty comes into play if the return is filed three months after an extended due date. Also, after nine months, interest begins to accrue on the balance of the inheritance tax owed.
Amended Inheritance Tax Return
If circumstances surrounding the inherited estate change, requiring adjustments to the original tax return, executors must file an amended return with the Oregon Department of Revenue within 90 days of federal filing.
Fill out Form IT-1 for the appropriate tax year, check the “amended return” box and submit the state form along with your federal amended return Form 706. Make sure to include copies of any federal audit reports or schedules necessary explaining the amended taxation of the inherited estate.
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