[Revenews] (Date Correction) New - Estate Transfer Tax

[FARR David]

Hello,

We apologize for an error regarding the proper filing dates for Form IT-1 in yesterday's email. (See corrections in red.) We've also made some clarifications regarding the Natural Resource Credit (NRC).


*         Form IT-1, Oregon Inheritance tax return will not be accepted for deaths on or after January 1, 2012. The Form IT-1 is still used for deaths on or before December 31, 2011.


Natural resource credit - For natural resource credit (NRC) property;

1.    NRC property will be reported with the Form OR-706 on Schedule NRC.

2.    Each transferee receiving NRC property must report to us annually confirming the NRC assets continue to qualify for the credit; the annual reporting form is currently under construction.


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Full text with corrections:


Hello Tax Professionals,

On January 1, 2012 Oregon's Inheritance tax changed to an Estate Transfer Tax as amended by the 2011 Oregon House Bill (HB) 2541. For deaths on or after January 1, 2012, you'll file new Form OR706, Oregon Estate Transfer tax return and related forms and  schedules (currently under construction). Form IT-1, Oregon Inheritance tax return will not be accepted for deaths on or after January 1, 2012. It is still used for deaths on or before December 31, 2011.

Oregon HB 2541 amended the Oregon Revised Statute Chapter 118. Oregon estate transfer tax is tied to federal estate tax as it existed on December 31, 2010. The filing threshold remains at a gross estate of $1 million valued as of the date of death. Please take some time to read all of HB 2541 amendments to Chapter 118, here are only some of those amendments:

*         Proration of tax - An Oregon nonresident decedent will include only real property located in Oregon and tangible personal property located in Oregon in the numerator to determine the Oregon percentage computation for tax proration.

*         Tax table and exemption - Uses only one tax table and built into the tax table is an exclusion from tax on the first $1 million of taxable estate.

*         Unified credit - Eliminates the need to compute a tentative tax and eliminates the use of the unified credit.

*         Natural resource credit - For natural resource credit (NRC) property:

1.  NRC property will be reported with the Form OR-706 on Schedule NRC.
2. Each transferee receiving NRC property must report to us annually confirming the NRC assets continue to qualify for the credit; the    annual reporting form is currently under construction.
We'll send another ReveNews email when the new Form OR706 and related forms and schedules become available on our website. To see prior Revenews, visit the Revenews Archives<http://listsmart.osl.state.or.us/pipermail/revenews/>.

If you have other questions email us at estate.help.dor at state.or.us<mailto:estate.help.dor at state.or.us> or call our taxpayer assistance at 503.378.4988 (or toll-free from an Oregon prefix 1.800.356.4222).

Estate Tax Unit
Oregon Department of Revenue




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