Instructions For Form It-1 - Inheritance Tax - 2011 Page 8
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19A credit is allowed if qualifying property is involuntarily
file Form IT-1A, Additional Oregon Inheritance Tax Return.
converted (as defined by Section 1033) and the proceeds
This return and the additional tax is due within six months
are used to acquire qualifying replacement property, the
after the date the property ceases to be a natural resource or
cost of which equals or exceeds the amount realized on the
fishing business property.
conversion.
The additional tax liability is the amount of the credit
Compute your credit using the following table.
allowed on the disqualified property multiplied by [(five
minus the number of years the property was used as natu-
Credit formula: [(Natural Resource Property value – amount
ral resource property) divided by five]. The additional tax
in column 1) × column 4] + column 3 = credit
will be paid by the owner of the property at the time of the
Column 1
Column 2
Column 3
Column 4
disposition of the property or the disqualifying event.
Value of the
Formula: Credit × [( 5 – number of years property used as
property for
Credit
qualified property) ÷ 5]
which credit is
allowed on
Example: Jack inherited natural resource property. The
allowed equal
Value of prop-
the amount
to or more than
erty is less than
in column 1
Percentage
natural resource credit claimed on the inheritance tax return
was $80,000. Jack held the property and used it as a natu-
$0
$100,000
$0
ral resource property for two years after the date of death
100,000
150,000
0
0.8%
before selling the property. Jack must pay the inheritance
150,000
200,000
400
1.6%
tax as follows:
200,000
300,000
1,200
2.4%
$80,000 credit x (5 – 2 years of use = 3) ÷ 5 = $48,000. As the
300,000
500,000
3,600
3.2%
owner of the disqualified property, Jack is responsible for
500,000
700,000
10,000
4.0%
$48,000 of tax.
700,000
900,000
18,000
4.8%
Line 20. Amount paid by the due date of the
900,000
1,100,000
27,600
5.6%
return
1,100,000
1,600,000
38,800
6.4%
For an original Form IT-1, enter the total of prior timely pay-
1,600,000
2,100,000
70,800
7.2%
ments. For an amended return, enter the net payments (prior
2,100,000
2,600,000
106,800
8.0%
payments less prior refunds) to date.
2,600,000
3,100,000
146,800
8.8%
Example: Inheritance tax payments made with the original
3,100,000
3,600,000
190,800
9.6%
return = $105,000. Tax on the original return: $88,000. Refund
3,600,000
4,100,000
238,800
10.4%
paid to the estate: $17,000.
4,100,000
5,100,000
290,800
11.2%
$105,000 − $17,000 = $88,000: This is the amount of your prior
5,100,000
6,100,000
402,800
12.0%
payments reduced by prior refunds. Enter this amount on
your amended return as your net prior payments.
6,100,000
7,100,000
522,800
12.8%
7,100,000
7,500,000
650,800
13.6%
Line 23. Penalty due
7,500,000
8,100,000
402,800
13.0%
A penalty of 5 percent of the tax will be imposed if the return
8,100,000
9,100,000
253,344
12.5%
is not filed within nine months from the date of death or by
9,100,000
10,100,000
146,800
12.0%
the extended due date. If you file more than three months
after the due date (including extension), add an additional
10,100,000
11,100,000
35,400
11.2%
20 percent penalty, for a total penalty of 25 percent.
11,100,000
12,100,000
15,520
7.7%
A penalty of 5 percent of the tax will be imposed if the tax is
12,100,000
13,100,000
8,000
5.7%
not paid within nine months from the date of death. If you
13,100,000
14,100,000
0
3.7%
have an approved extension of time to pay, the tax must be
14,100,000
15,100,000
0
1.7%
paid by the extended payment date.
15,100,000
—
0
0%
Line 24. Interest due
Example: If a $2,000,000 estate had $1,200,000 in natural
If you are filing or paying after the due date, calculate and
resource property, compute your credit as follows:
pay interest on any unpaid tax or on tax paid after the origi-
1,200,000 – 1,100,000 = 100,000 × 0.064 = 6,400 + 38,800 =
nal due date. An interest period is each full month starting
$45,200 credit allowable
with the day after the due date. For example, April 16 to May
If the natural resource or commercial fishing business
15 is a full month and interest period. We calculate interest
property is not used for five out of eight years after death,
daily for periods of less than a month. Interest accrues on
an additional tax is due from the property owner under
any unpaid tax during an extension of time to file. Here’s
ORS 118.005 to 118.840. Each property owner will need to
how to calculate the interest due:
8
150-103-001 (Rev. 08-11)
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