Instructions For Form It-1 - Inheritance Tax

Tax x Annual interest rate x Number of full years.

If you elect alternate valuation, value the property that is

included in the gross estate as follows:

Tax x Monthly interest rate x Number of months.

Tax x Daily interest rate x Number of days.

1. Any property distributed, sold, exchanged, or otherwise

disposed of or separated or passed from the gross estate

For periods beginning

Annual Monthly

Daily

by any method within six months after the decedent’s

January 1, 2012

0.4167% 0.0137%

death is valued on the date of distribution, sale, exchange,

January 1, 2011

0.4167%

0.0137%

or other disposition, whichever occurs first. Value this

January 1, 2010

0.4167% 0.0137%

property on the date it ceases to form a part of the gross

For periods not shown above, go to:

estate; i.e., on the date the title passes as the result of its

sale, exchange, or other disposition.

Additional interest on deficiencies and delinquencies.

Interest will increase by one-third of 1 percent per month

2. Any property not distributed, sold, exchanged, or otherwise

(4 percent yearly) on deficiencies or delinquencies if the fol-

disposed of within the six-month period is valued on the

date six months after the date of the decedent’s death.

lowing occurs:

3. Any property, interest, or estate that is “affected by

• You file a return showing tax due, or the Department of

mere lapse of time” is valued as of the date of decedent’s

Revenue has assessed an existing deficiency; and

death or on the date of its distribution, sale, exchange, or

• The assessment is not paid within 60 days after we issue

other disposition, whichever occurs first. However, you

the notice of assessment; and

may change the date of death value to account for any

• You have not filed a timely appeal.

change in value that is not due to a “mere lapse of time”

on the date of its distribution, sale, exchange, or other

Special instructions. Do you owe penalty on part 2, line 23

disposition.

or interest on line 24 and have an overpayment on line 22?

If your overpayment is less than the total penalty and inter-

The property included in the alternate valuation and valued

est, you have an amount due. To calculate the amount due,

as of six months after the date of the decedent’s death, or as

fill in on line 25 the result of line 23 plus line 24 minus line

of some intermediate date (as described above) is the prop-

22. If your overpayment is more than the total penalty and

erty included in the gross estate on the date of the decedent’s

interest, to calculate your refund, enter on line 26 the result

death. Therefore, you must first determine what property

of line 22 minus the sum of line 23 plus line 24.

constituted the gross estate at the decedent’s death.

If you elect alternate valuation for the estate assets, you must

Line 25. Total due

include documentation to support both the date of death

Enclose a check or money order for the total amount due (tax

value and the alternate value.

plus any applicable penalty and interest) with your return.

Include the payment voucher (Form IT-V) with your check.

Interest

Do not send cash or postdated checks. Place your check and

Interest accrued to the date of the decedent’s death on bonds,

Form IT-V in the envelope with your tax return; do not staple

notes, and other interest-bearing obligations is property of

your check or Form IT-V to any page of your tax return.

the gross estate on the date of death and is included in the

alternate valuation.

Part 3: Elections by the executor

Rent

Rent accrued to the date of the decedent’s death on leased

Line 1. Alternate valuation

real or personal property is property of the gross estate on

Unless you elect at the time you file the return to adopt

the date of death and is included in the alternate valuation.

alternate valuation as authorized by Section 2032, you must

value all property included in the gross estate on the date of

Dividends

the decedent’s death. Alternate valuation, if timely elected,

Outstanding dividends that were declared to stockholders

will apply to all property in the estate; it cannot be applied

of record on or before the date of the decedent’s death are

to only part of the property.

considered property of the gross estate on the date of death,

and are included in the alternate valuation. Ordinary divi-

You may elect special use valuation (line 2) in addition to

dends declared to stockholders of record after the date of the

alternate valuation.

decedent’s death are not property of the gross estate on the

You may not elect alternate valuation unless the election will

date of death and are not included in the alternate valuation.

decrease both the value of the gross estate and the total net

However, if dividends are declared to stockholders of record

estate and taxes due after application of all allowable credits.

after the date of the decedent’s death so that the shares of

You may elect alternate valuation by checking “Yes” on line

stock at the later valuation date do not reasonably represent

1 and filing Form IT-1. Once made, the election may not be

the same property at the date of the decedent’s death, include

revoked. The election may be made on a late filed Form IT-1

those dividends (except dividends paid from earnings of

provided it’s the first return and it’s not filed later than one

the corporation after the date the decedent’s death) in the

year after the due date (including extensions).

alternate valuation.

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

Instructions For Form It-1 - Inheritance Tax - 2011 Page 9

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