Form Or706-A - Oregon Additional Estate Transfer Tax Return
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6Instructions for Form OR706-A, Oregon Additional Estate Transfer Tax Return
Use this form only if you inherited natural resource property on or after January 1, 2012. If you inherited natural
resource property before January 1, 2012, use Form IT-1A, Oregon Additional Inheritance Tax Return.
Definitions
2. The decedent’s registered domestic partner; or
3. Another entity eligible for the credit. Note: Nontaxable
The terms we use in these instructions are defined
events described above relate only to the addition estate
in Oregon Revised Statute (ORS) 118.140 and Oregon
transfer tax per chapter 118. If a sale takes place, even
Administrative Rule (OAR) 150-118.140.
to a family member, the seller may have a capital gain
“Property” means natural resource property or commer-
which would be reported on their personal income
cial fishing property used for the natural resource credit
taxes.
on Form OR706.
See example 3.
“Property owner” means you, the person who received
Even if you don’t owe tax, you must complete and file
property from the decedent.
Form OR706-A to notify us of a change in property own-
“Qualified use” means to use the property as a natural
ership. Complete only parts 1, 2, 5, and 6 of this form.
resource or commercial fishing business property.
Replacement of natural resource property and
“Disqualified property” means property that:
involuntary conversions
• You disposed of, or stopped qualified use of, before
five out of eight calendar years had passed after the
Read below for information on when to file a return in the
decedent’s death.
case of replacement property or involuntary conversion.
• Was subject to an involuntary conversion and you did
Replacement of property. After the credit is claimed,
not reinvest all of the proceeds from the involuntary
you may replace natural resource property with real or
conversion.
personal property, as long as the replacement property
“Involuntary conversion” as defined in the Internal Rev-
is used as natural resource property and all proceeds are
enue Code (IRC), section 1033.
reinvested in natural resource property. Real property for
which the credit was claimed may only be replaced with
Taxable events
real property. The replacement property must be acquired
within one year to avoid a disposition and additional tax.
The property owner causes a taxable event if the property
See example 4.
is not used as set out in ORS 118.140.
Involuntary conversions. If, within two years of an invol-
• The property is disposed of or the qualified use of the
untary conversion, you reinvest all proceeds in qualified
property stops before it is used for five out of eight
replacement property, you won’t owe additional estate
calendar years after the decedent’s death.
transfer tax. Complete parts 1–3 and 6 to notify us that an
• Involuntary conversions—you may owe additional tax
involuntary conversion took place, even though you owe
if you don’t reinvest the proceeds or reinvest only part
no tax. If you don’t replace the property within two years
of the proceeds from the involuntary conversion.
of the involuntary conversion, you’ll owe additional tax.
As the property owner, you are responsible for reporting
Partially taxable involuntary conversions. If you paid
and paying any additional estate transfer tax imposed
less for the qualified replacement property than you
by ORS 118.140. You must file Oregon Form OR706-A to
received in the involuntary conversion or you don’t rein-
report the taxable event. The additional tax is limited to
vest the entire amount received from the conversion, then
the tax credit claimed on Form OR706. See example 1.
the conversion is partially taxable. See example 5.
If you and other qualified family members shared owner-
ship of the property and you stop the qualified use, your
Return due date
additional tax will be based only on your share of the
Generally. File Form OR706-A and pay any additional
property. See example 2.
taxes due within six months after you disposed of the
property or ended the qualifying use.
Nontaxable events for disposition to a family
member
Exchange or involuntary conversion
Property is not disqualified if you transfer the property
The tax return and additional tax are due six months from
to:
the taxable event. A taxable event takes place only when
1. Another member of the decedent’s family; or
your property isn’t replaced within the allowed time. For
150-104-007 (Rev. 07-14)
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Form OR706-A Instructions
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