Instructions For Form It-1 - Inheritance Tax

we cannot allow the calculation of the taxable estate after

January 1, 2007. You may elect to take all, part, or none of

the state death tax deduction.

this credit, for which you qualify. Natural resource property

is farm use and forestland, as defined in ORS 308A.056,

Line 15a.

308A.250, and 321.201. The qualifying property also includes

Compute the Oregon inheritance tax starting with line 3,

property used in commercial fishing business operations

taxable estate; reduce the taxable estate by $60,000 and use

defined in ORS 508 and Section 1301(b)(4).

the charts on Table B.

To claim this credit, you must use Schedule NRC. Complete

all parts, and attach it to your Form IT-1. Find Schedule

Line 15b.

NRC on our website at Every fam-

Compare the amounts on line 14 and 15a and enter the smaller

ily member inheriting all or part of the Natural Resource

amount on line 15b. This is your Oregon inheritance tax.

property must keep a copy of the Schedule NRC with their

Example:

permanent tax records.

Line 3 $1,055,000 − $60,000 =

$995,000

You may include tangible and intangible personal property

Tax on $840,000 =

$27,600

used for farm, forestry, or fishing business purposes, such

($995,000 − $840,000) × .056 =

$8,680

as:

Line 15a tax ($27,600 + $8,680) =

$36,280

• Timber, trees, and improvements.

Compare this amount to the amount on line 14 and enter the

• Crops, both growing and stored.

smaller amount on line 15b.

• Forestry and farming equipment.

Line 16. Proration of Oregon inheritance tax

• Boats, gear, equipment, vessel licenses, commercial fishing

licenses, and permits.

When the estate has property located outside of Oregon,

use lines 16a, b, and c to compute the prorated Oregon tax.

• Equipment used to process and sell the catch of a com-

mercial fishing business in fresh, canned, or smoked form

16a. Gross value of property taxable by Oregon

directly to consumers, including a restaurant with seating

Enter the gross value of property taxable by Oregon. Prop-

capacity of less than 15 seats, which prepares and sells

erty taxable for Oregon purposes depends on whether

catch from the fishing business.

the decedent was a resident or nonresident. Highlight or

• Working capital of natural resource business or com-

underline the Oregon property on the attached schedules.

mercial fishing business owned by the decedent at the

• Resident decedent. For a resident decedent, property

decedent’s death.

taxable by Oregon includes real property and tangible per-

This credit is allowed only if all of the following require-

sonal property located in Oregon, and intangible personal

ments are met:

property wherever located.

• The total adjusted gross estate does not exceed $15 million.

• Nonresident decedent. For a nonresident decedent, prop-

erty taxable by Oregon includes real property and tangible

• The total value of the qualifying property is at least 50 per-

and intangible personal property located in Oregon. An

cent of the total adjusted gross estate. Adjusted gross estate

exemption is allowed for intangible personal property

is defined in OAR 150-118.140, Inheritance Tax Credit for

located in Oregon if a like exemption is allowed by the

Natural Resource or Commercial Fishing Property.

state of residence.

• The property is transferred to, or held in trust for a

16b. Gross value of all property wherever situated

member of the family as defined by Section 2032A or the

decedent’s registered domestic partner.

Enter the amount of the gross estate (Part 2, line 1).

• During an aggregate five out of eight years prior to death,

16c. Oregon percentage

the decedent, a member of the family, or the decedent’s

Divide the amount on line 16a by the amount on line 16b;

registered domestic partner owned and used the property

round the decimal to four places. Convert the decimal to a

for farm or forest purposes.

percentage by multiplying the decimal by 100 or move the

• Natural resource and fishing property must be in use for

decimal two places to the right. Write the percentage on line

five of the eight years following death.

16c. Don’t fill in more than 100 percent or less than -0-.

Oregon will allow a credit for property that meets the above

Example:

requirements if:

Line 16a

Line 16b

Line 16c

• The qualifying property is held in a closely held business,

$800,000 ÷ $1,450,000 = 0.5517 or 55.17%

such as a limited liability company, a corporation, a part-

Line 18. Natural resource and commercial fishing

nership, or a trust as used in Section 6166(b).

business credit

• At least one member of the family or the decedent’s reg-

ORS 118.140 provides a natural resource or commercial fish-

istered domestic partner must materially participate (as

defined in Section 2032A) in the business after the transfer.

ing business credit. The credit applies to deaths on or after

150-103-001 (Rev. 08-11)

Instructions For Form It-1 - Inheritance Tax - 2011 Page 7

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