Source: http://www.docstoc.com/docs/99306119/Inheritance-Tax
Timestamp: 2015-06-03 02:07:47
Document Index: 355584159

Matched Legal Cases: ['art 2', 'art 2', 'art 1', 'art 2', 'art 3', 'art 4', 'art 5', 'art 6', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 5', 'art 3', 'art 2', 'art 1', 'art 3', 'art 5', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 3', 'art 4', 'art 5', 'art 5', 'art 4', 'art 4', 'art 4', 'art 4', 'art 4', 'art 1', 'art 2', 'art 5', 'art 5', 'art 3', 'art 4', 'art 4', 'art 5', 'art 5', 'art 2', 'art 2', 'art 6']

Inheritance Tax by alicejenny
99306119
Oregon                                                                                                             Form IT-1 and Instructions
This publication is a guide, not a complete statement, of Oregon Revised Statutes (ORS) and Oregon Department of Revenue
Administrative Rules (OAR). For more information, refer to the laws and rules on our website, www.oregon.gov/DOR.
You may claim a separate election (such as alternate valua-
New information                                                     tion or the marital deduction) for Oregon purposes. If you
The 2007 Oregon Legislature passed House Bill (HB) 3201,            make a separate Oregon election, you must attach a schedule
which provides exclusion for natural resource property or           to explain the figures you used and mark the appropriate
commercial fishing property—up to $7.5 million—if trans-            box on Form IT-1. To refer to OAR 150-118.010(7), the rule
ferred to a qualifying relative. The exclusion is applicable        allowing separate elections, you may visit the Secretary of
for deaths on or after January 1, 2007. If you qualify for this,    State website at www.oregon.gov/SOS.
complete the new Oregon Schedule NRE. We will index this
exclusion for inflation each year.
The Oregon Legislature also passed HB 2007, which only
affects returns filed for tax year 2008 and after. The 2008         The gross estate of the decedent is the true cash value of all
instructions will provide more information on this law              real and personal property, tangible or intangible, as of the
change.                                                             date of death, wherever situated.
To refer to the new bills, visit the Oregon State Legislature       Executor
website at www.leg.state.or.us/bills_laws.
According to ORS 118.005, the definition of “Executor” is
the executor, administrator, personal representative, fidu-
ciary, or custodian of property of the decedent. For probate
Purpose of Form IT-1                                                estates, the personal representative appointed or approved
by the court has the duty to file the return. For non-probate
The executor of a decedent’s estate uses Oregon Inheritance
Tax Return (Form IT-1) to figure the estate tax imposed by          estates, any person having actual or constructive possession
ORS Chapter 118. This tax is levied on the entire taxable es-       of the property of the decedent is responsible for filing the
tate, not just on the share received by a particular beneficiary.   return.
If the estate has assets outside of Oregon, you will prorate
If two or more persons are liable for filing a return, they
the tax on Part 2, line 16.
should all join together in filing one complete return. How-
Please note:                                                        ever, if they are unable to join in making one complete return,
• Section references are to the Internal Revenue Code as it         each is required to file a return disclosing all the information
existed on December 31, 2000.                                     the person has in the case, including the name of every per-
• Schedule references are to the schedules included in the          son holding an interest in the property and a full description
federal Form 706, U.S. Estate Tax Return.                         of the property. If the appointed, qualified, and acting execu-
Filing requirements                                                 tor is unable to make a complete return, then every person
holding an interest in the property must, on notice from the
An Oregon Inheritance Tax Return (Form IT-1) must be filed
department, make a return regarding that interest.
for dates of death on or after January 1, 2006, if the value of
the gross estate is $1,000,000 or more. If the estate has assets
that are taxable in another state, we apportion the tax, on            Contents
part 2, line 16.                                                       New information .............................................................1
If you have filed with the IRS, attach the Form 706, sched-            Overview ..........................................................................1
ules, and supporting documents and check the appropriate               Part 1: Decedent and executor information .................4
box.                                                                   Part 2: Tax computation ..................................................4
Part 3: Elections by the executor ...................................8
If you have no filing requirement with the IRS, you must               Part 4: General information .........................................13
complete Form IT-1 and attach the schedules from the federal           Part 5: Recapitulation....................................................14
Form 706. Oregon requires the same forms, schedules, and               Part 6: Signatures ...........................................................15
supporting information (such as photocopy of death certifi-            Taxpayer assistance .......................................................15
cate, Form 712, will, trust, appraisals, etc.) as would have           Form IT-1, Inheritance Tax Return ..............................17
been required if the estate had filed a federal return.
150-103-001 (10-07)                                                                                                                 www.oregon.gov/DOR
When to file return                                                   an extension to file and use the Oregon figures. When you
file the return, please mark the appropriate box on Form IT-1
You must file Form IT-1 within nine months after the date             and attach a copy of the extension form.
of the decedent’s death, unless you request an extension of
time to file.                                                         If you need an extension to pay for Oregon only, you may
write at the top of federal Form 4768, “For Oregon only.” On
Payment                                                               that form, please check the box for extension to pay, use the
Oregon figures, and mail it to us by the return due date. We
The tax payment is due within nine months after the date of           will use the same criteria used by the IRS in consideration
the decedent’s death, unless you have requested an extension          of your request. We will stamp it approved or denied and
of time for payment or an installment payment agreement.              return a copy to you. When you file the return, please mark
the appropriate box on Form IT-1 and attach a copy of the
If the tax paid with the return is different from the balance
approved extension form.
due as shown on the return, explain the difference in an at-
tached statement. If the IRS has granted an extension of time         If you need additional time to pay Oregon, see page 12 for
to pay, attach a copy of the Form 4768 to Form IT-1.                  information about installment payments.
To assist us in posting your payment to the proper account,
use Form IT-V, Oregon Inheritance Tax Payment Voucher. Do             Signature and verification
not send Form IT-V without a payment. Form IT-V is avail-             If there is more than one executor, all listed executors must
able on our website at www.oregon.gov/DOR.                            verify and sign the return. All executors are responsible for
You may send payment prior to filing the return, with the             the return as filed and are liable for penalties provided for
return, or after the return. Be sure to include Form IT-V with        erroneous or false returns per ORS 118.990.
• Mail your check with your payment voucher if you want
to make prepayments.                                                Did you amend the federal estate tax return, or did the IRS
• Enclose your check and payment voucher with your return             make an adjustment that results in a change in tax? If yes, it
before mailing.                                                     is the duty of the executor or other responsible person to file
• Enclose your check with your payment voucher by the due             an amended Oregon return or notify the Oregon Department
date of the return to avoid penalty and interest.                   of Revenue of the change in writing within 90 days.
• Payments, received after the due date, will be applied first        Attach the federal schedules, which have changed since the
to penalty, interest, and then to tax.                              prior return, and check the box. If the value is amended,
provide substantiation, such as appraisals or a Report of Estate
Tax Examination Changes issued by the IRS.
The 2005 Oregon Legislature passed House Bill (HB) 2469,
If you submitted a federal extension, attach a copy of Form
which allows Oregon qualified terminable interest property
4768 (Application for Extension of Time to File a Return and/or
(QTIP) elections to be taken on amended returns. For more
Pay U.S. Estate and Generation-Skipping Transfer Taxes) to Form
information on this new law, refer to the legislature’s website
IT-1 and mark the extension box on the Form IT-1. Oregon
at www.oregon.gov/LEG.
accepts an extension of time to file an estate tax return, or
an extension of time to pay estate tax, as granted by the             Form IT-V, Oregon Inheritance Tax Payment Voucher, must ac-
Internal Revenue Service.                                             company a payment with an amended return.
More than one type of extension is available for an inheri-
tance tax return.                                                     Supplemental documents
• An extension of time to file the return does not extend             You must attach a photocopy of the death certificate to the
the time to pay the tax. You must request a separate exten-         return. If the decedent was a citizen or resident and died
sion of time to pay the tax.                                        testate, attach a photocopy of the will to the return.
• An extension of time to pay the tax does not extend the             Other supplemental documents may be required. Examples
time to file the return. You must request an extension of           include federal Forms 712, 709, 709-A, and 706-CE, expert
time to file the return.                                            valuations, appraisals, trust and power of appointment
• Interest accrues during the extension period.                       instruments. Processing delays will result if you do not file
the required documents with the return.
To avoid penalties and interest, use Form IT-V to make an
extension payment by the due date. You may not obtain an              If the decedent was a U.S. citizen but not a resident of the
extension without a payment, by using Form IT-V.                      United States, you must attach the following documents to
If you need an automatic six-month extension to file for
Oregon only, you may write at the top of federal Form 4768,           • A copy of the inventory of property and the schedule of li-
“For Oregon only.” On that form, please check the box for               abilities, claims against the estate, and expenses of admin-
www.oregon.gov/DOR                                                2                                                  150-103-001 (10-07)
istration filed with the foreign court of probate jurisdiction,       appropriate federal schedules, A through I, to support the
certified by a proper official of the court;                          entries on lines 1 through 9 of Part 5—Recapitulation.
• A copy of the return filed under the foreign inheritance,
estate, legacy, succession tax, or other death tax act, certi-        — If you enter zero on any line of Part 5—Recapitulation,
fied by a proper official of the foreign tax department, if             then you do not need to file the schedule (except for
the estate is subject to such a foreign tax; and                        Schedule F).
• If the decedent died testate, a photocopy of the will.                — If you claim an exclusion on line 11 of Part 5—Recapitu-
lation, then complete and attach Schedule U.
Rounding off to whole dollars                                           — If you claim an exclusion on line 12 of Part 5—Recapitu-
lation for the new Natural resource property exclusion,
Please enter amounts on the return and accompanying                       then complete and attach the new Oregon Schedule NRE.
schedules as whole dollars only.                                          This schedule is available on our website at www.oregon.
gov/DOR.
Late filing penalty occurs                                              — If you claim any deductions on lines 14 through 24 of
If you file within three months of the due date, including an             Part 5—Recapitulation, then complete and attach the ap-
extension, add a late filing penalty of 5 percent of the tax. If          propriate schedules to support the claimed deductions.
you file more than three months after the due date or the ex-           — If there is not enough space on a schedule to list all the
tended filing date, add an additional penalty of 20 percent.              items, then attach a Continuation Schedule.
• Form IT-1 has three pages.
Late payment penalty                                                    • Number the items you list on each schedule, beginning
If tax is unpaid as of the due date, including an extension,              with the number “1” each time.
add a delinquency penalty of 5 percent of the tax.                      • Total the items listed on each schedule and its attachments,
Continuation Schedules, etc.
Interest                                                                • Enter the total of all Schedules, Continuation Schedules,
etc., at the bottom of each schedule
Interest is charged on tax not paid within nine months of               • Do not carry the totals forward from one schedule to the
the date of death. Interest will accrue during the extension              next.
period. The interest rate may change once a calendar year. If           • Enter the total for each schedule on Part 5—Recapitulation,
the tax is unpaid within 60 days of our bill, the interest rate
increases by 4 percent per year.
• Do not complete the “Alternate valuation date” or “Alter-
Interest period              Annual      Monthly      Daily             nate value” columns of any schedule unless you elected
January 1, 2008                9%         0.75%      0.0247%            alternate valuation on line 1 of Part 3—Elections by the
January 1, 2007                9%         0.75%      0.0247%            executor.
For periods not shown above, go to: www.oregon.gov/                     • When you complete the return, staple all these required
DOR/PERTAX/docs/800-691.pdf.                                              pages together in the following order:
Obtaining Oregon forms and publications using a                            1. Pages 1, 2, 3 of Form IT-1
personal computer                                                          2. Pages 1, 2, 3 of Form 706, if filing with federal
You may access the Oregon Department of Revenue’s In-                      3. Federal schedules in alphabetical order, with Forms
ternet website anytime at www.oregon.gov/DOR to do the                        712, as required
4. Oregon Schedule NRE, if required
• Download current forms, instructions, and publications.
• Request help via e-mail.                                                 5. Form 4768 Extension request
• Download prior year forms and instructions.
• Form IT-1 may be filled in online and printed out for sub-
mission and record keeping.                                              7. Will
9. Powers of appointment document
Federal forms and publications are available on the IRS web-
site at www.irs.gov, or by calling 1-800-829-3676.                        10. A copy of another states estate tax return or
foreign estate tax return, if the estate is subject
Specific instructions                                                     11. A copy of property inventory, schedule of liabilities,
You must file all pages of Form IT-1 and attach Form 706 and                  claims against the estate, and expenses of
schedules, if you filed with federal. If you are not required                 administration filed with a foreign probate court,
to file with federal, you must file all pages of Form IT-1, the               certified by an official of the court
150-103-001 (10-07)                                                 3                                                www.oregon.gov/DOR
• Do not staple the following required documents to the                                                In general, the gross estate tax is figured by applying the
return:                                                                                              unified rates shown in Table A, on page 6, to the total of
1. Forms 709                                                                           transfers both during life and at death, and then subtracting
the gift taxes. The result on line 14 then acts as a limitation
2. Expert valuations
to the state death tax on line 15. Please complete Part 2—Tax
3. Independent fee appraisals                                                          computation.
Part 1: Decedent and executor information                                                         Line 1
If you elected alternate valuation on line 1, Part 3—Elections
Decedent’s name and Social Security number (SSN)
by the executor, enter the amount you entered in the “Al-
Enter the decedent’s name and the SSN assigned specifically                                            ternate value” column on line 13 of Part 5—Recapitulation.
to the decedent. You cannot use the SSN assigned to the                                                Otherwise, enter the amount from the “Value at date of
decedent’s spouse. If the decedent did not have a SSN, the
death” column.
executor should obtain one for the decedent by filing Form
SS-5, Application for Social Security Card, with a local Social
Enter the total allowable deductions from page 3, Part
Decedent’s domicile                                                                                    5—Recapitulation, line 24.
Domicile is the place where the decedent had his fixed,
permanent, principal home. The decedent had only one do-                                               Line 3
micile, though he may have had multiple residences.                                                    Due to recent changes to federal estate law, the calculation
might differ from the calculation on Form 706. Oregon is tied
to the 2000 federal estate law, so we cannot allow the calcula-
If there is more than one executor, please enter the name and                                          tion of the taxable estate after the state death tax deduction.
the address of the executor to be contacted by the depart-
ment. List the other executors’ names, addresses, telephone
Lines 4 (adjusted taxable gifts) and 9 (total gift
numbers, and SSNs on an attached sheet. Please notify us of
a change of address or telephone numbers for the executor(s)                                           tax payable)
or authorized representative.                                                                          Three worksheets are provided to help you compute the
entries for these lines. You do not need to file these work-
Part 2: Tax computation                                                                           sheets with your return, but you should keep them for your
Worksheet TG. Taxable gifts reconciliation (to be used for lines 4 and 9 of Part 2—Tax computation)
Gifts made after June 6, 1932,
Note: For the definition of a taxable gift see Section 2503. Ignore the old specific exemption. Follow
a.                         b.               Form 709. That is, include only the decedent’s one-half of split gifts, whether the gifts were made by
Calendar year or       Total taxable gifts for    the decedent or the decedent’s spouse. In addition to gifts reported on Form 709, you must include
and before 1977
calendar quarter         period (see note)        any taxable gifts in excess of the annual exclusion that were not reported on Form 709.
c.                        d.                       e.                         f.
Taxable amount            Taxable amount           Gift tax paid by           Gift tax paid by
included in column b      included in column b      decedent on gifts in       decedent’s spouse
for gifts included in the for gifts that qualify for      column d              on gifts in column c
1. Total taxable gifts                                   gross estate       “special treatment of split
made before 1977                                                          gifts” described above
2. Totals for gifts
made after 1976
www.oregon.gov/DOR                                                                                4                                                               150-103-001 (10-07)
Line 4 worksheet. Adjusted taxable gifts made after 1976
1. Taxable gifts made after 1976. Enter the amount from column b, Worksheet TG ......................................................... 1.
2. Taxable gifts made after 1976 reportable on Schedule G. Enter the amount from
line 2, column c, Worksheet TG ....................................................................................2.
3.Taxable gifts made after 1976 that qualify for “special treatment.” Enter the
amount from line 2, column d, Worksheet TG.................................................................3.
4. Add lines 2 and 3............................................................................................................................................................ 4.
5. Adjusted taxable gifts. Subtract line 4 from line 1. Enter here and on line 4 of the Tax Computation of Form IT-1 ........... 5.
Line 9 worksheet. Gift tax on gifts made after 1976
Calendar year or                   Total taxable gifts
calendar quarter                    for prior periods                           c.                                  d.                                e.                                     f.
(from Form 709, Tax                    Taxable gifts for                   Tax payable using                Unused unified credit               Tax payable for this period
Computation, line 2)               this period (from Form                 table A (see below)                (applicable credit                  (subtract column e from
709, Tax Computation,                                                   amount) for this period                      column d)
Total pre-1977 taxable
line 1) (see below)                                                        (see below)
gifts. Enter the
amount from line 1,
1. Total gift taxes payable on gifts made after 1976 (combine the amounts in column f) .................................................. 1.
2. Gift taxes paid by the decedent on gifts that qualify for “special treatment.” Enter the amount from line 2,
column e, Worksheet TG .................................................................................................................................................... 2.
3. Subtract line 2 from line 1 .............................................................................................................................................. 3.
4. Gift tax paid by decedent’s spouse on split gifts included on Schedule G. Enter the amount from line 2,
column f, Worksheet TG ..................................................................................................................................................... 4.
5. Add lines 3 and 4. Enter here and on line 9 of the Form IT-1 ......................................................................................... 5.
Columns b and c. In addition to gifts reported on Form 709, you must include in these columns any taxable gifts in excess of the an-
nual exclusion that were not reported on Form 709.
Column d. To figure the “tax payable” for this column, you must use Table A in these instructions, as it applies to the year of
the decedent’s death rather than to the year the gifts were actually made. To compute the entry for column d, you should figure the
“tax payable” on the amount in column b and subtract it from the “tax payable” on the amounts in columns b and c added
together. Enter the difference in column d.
“Tax payable” as used here is a hypothetical amount and does not necessarily reflect tax actually paid. Figure “tax payable”
only on gifts made after 1976. Do not include any tax paid or payable on gifts made before 1977. Pre-1977 gifts are listed only
to exclude them from the calculation.
To calculate the tax, enter the amount for the appropriate year from column c of the worksheet on line 1 of the Tax Compu-
tation of the Form 709. Enter the amount from column b on line 2 of the Tax Computation. Complete the Tax Computation
through the tax due before any reduction for the unified credit (applicable credit amount) and enter that amount in column
d, above.
Column e. To figure the unused unified credit (applicable credit amount), use the unified credit (applicable credit amount)
in effect for the year the gift was made. This amount should be on line 12 of the Tax Computation of the Form 709 filed for
150-103-001 (10-07)                                                                                            5                                                                            www.oregon.gov/DOR
Worksheet TG—Taxable gifts reconciliation                            Special treatment of split gifts. These special rules apply
This worksheet allows you to reconcile the decedent’s life-
time taxable gifts to compute totals that will be used for the       • The decedent’s spouse predeceased the decedent;
line 4 worksheet and the line 9 worksheet.                           • The decedent’s spouse made gifts that were “split” with
the decedent under the rules of Section 2513;
You must have all of the decedent’s gift tax returns (Form           • The decedent was the “consenting spouse” for those split
709, United States Gift and Generation-Skipping Transfer Tax           gifts, as that term is used on Form 709; and
Return) before you complete Worksheet TG. The amounts                • The split gifts were included in the decedent’s spouse’s
you will enter on Worksheet TG can usually be derived                  gross estate under Section 2035.
from these returns as filed. However, if the IRS audited any         If all four conditions above are met, do not include these gifts
of the returns, you should use the amounts that were finally         on line 4 of the Part 2—Tax computation and do not include
determined as a result of the audits.                                the gift taxes payable on these gifts on line 9 of Part 2—Tax
computation. These adjustments are incorporated into the
In addition, you must include in column b of Worksheet TG
any gifts in excess of the annual exclusion made by the dece-
dent (or on behalf of the decedent under a power of attorney)
Line 6. Tentative federal tax
but for which no Forms 709 were filed. You must make a
reasonable inquiry as to the existence of any such gifts. The        Due to changes to federal estate law, the calculation probably
annual gift exclusion for 1977 through 1981 was $3,000 per           differs from the calculation on the Form 706. Oregon is
donee per year and $10,000 for years after 1981.                     tied to the 2000 federal estate law, so we cannot allow the
calculation of the taxable estate after the state death tax
For tax years beginning after 1998, the $10,000 exclusion for        deduction. You must use Table A in this booklet to calculate
gifts is indexed for inflation. See Revenue Procedure 98-61,         the tentative tax, which is part of the calculation for a
1998-52 I.R.B. 23                                                    limitation to the state death tax.
Table A—Unified rate schedule (according to federal                  Table B—Computation of maximum state death
law as of December 31, 2000)                                         tax (according to federal law as of December 31, 2000)
Column A            Column B      Column C      Column D            Taxable estate (Form IT-1, Part 2, line 3) less $60,000 =
Rate of tax        (adjusted taxable estate—for column 1 below)
Column 1          Column 2         Column 3         Column 4
Taxable            Taxable        Tax on      over amount
amount             amount        amount in    in column A            Adjusted                                          Rate of tax
over              not over      column A       (Percent)             taxable        Adjusted                          on excess
estate equal       taxable           Tax on        over amount
0             $10,000             0          18               to or more       estate less       amount in      in column 1
$10,000              20,000        $1,800          20                   than            than           column 1         (Percent)
20,000              40,000         3,800          22
0           $40,000                0           None
40,000              60,000         8,200          24
$40,000            90,000                0            0.8
60,000              80,000        13,000          26
90,000           140,000             $400            1.6
80,000             100,000        18,200          28
140,000           240,000            1,200            2.4
100,000             150,000        23,800          30                240,000           440,000            3,600            3.2
150,000             250,000        38,800          32                440,000           640,000           10,000            4.0
250,000             500,000        70,800          34                640,000           840,000           18,000            4.8
500,000             750,000       155,800          37                840,000         1,040,000           27,600            5.6
750,000           1,000,000       248,300          39
1,040,000         1,540,000           38,800            6.4
1,000,000           1,250,000       345,800          41              1,540,000         2,040,000           70,800            7.2
1,250,000           1,500,000       448,300          43              2,040,000         2,540,000          106,800            8.0
1,500,000           2,000,000       555,800          45              2,540,000         3,040,000          146,800            8.8
2,000,000           2,500,000       780,800          49              3,040,000         3,540,000          190,800            9.6
2,500,000           3,000,000     1,025,800          53              3,540,000         4,040,000          238,800           10.4
3,000,000                  —      1,290,800          55
4,040,000         5,040,000          290,800           11.2
5,040,000         6,040,000          402,800           12.0
6,040,000         7,040,000          522,800           12.8
7,040,000         8,040,000          650,800           13.6
8,040,000         9,040,000          786,800           14.4
9,040,000        10,040,000          930,800           15.2
10,040,000                —         1,082,800           16.0
www.oregon.gov/DOR                                               6                                                   150-103-001 (10-07)
Line 7.                                                                   is the amount of the taxable estate (Part 2, line 3 of the Tax
Computation) reduced by $60,000.
You can use Lines 7a through 7c to calculate the phase-out
of the graduated rates. The phase-out applies only if the
Line 16. Proration of state death tax
amount on line 5 exceeds $10 million.
When the estate has property located in other states, com-
Line 11. Maximum unified credit (applicable                               plete lines 16a, 16b, and 16c.
16a. Gross value of property taxable by Oregon
The applicable unified credit amount for Oregon is $345,800               Enter the gross value of property taxable by Oregon. Prop-
for estates of decedents dying after December 31, 2005. The               erty taxable for Oregon purposes depends on whether the
amount of the credit cannot exceed the amount of estate tax               decedent was a resident or nonresident. Please highlight the
imposed.                                                                  Oregon property on the attached schedules.
Important: If the estate is claiming a qualified family-owned busi-       • Resident decedent. For a resident decedent, property tax-
ness interest deduction (QFOBI) on Schedule T, the sum of the               able by Oregon includes real property and tangible per-
QFOBI deduction and the applicable exclusion amount cannot                  sonal property located in Oregon and intangible personal
exceed $1.3 million. Thus, if the maximum QFOBI deduction of                property wherever located.
$675,000 is claimed, the applicable exclusion amount would be             • Nonresident decedent. For a nonresident decedent, prop-
limited to $625,000, and the credit entered on line 11 would be             erty taxable by Oregon includes real property and tangible
$202,050.                                                                   and intangible personal property located in Oregon. An
If the amount of the QFOBI deduction is less than $675,000, in-             exemption is allowed for intangible personal property
crease the applicable exclusion amount by the difference between            located in Oregon if a like exemption is allowed by the
$675,000 and the amount of the QFOBI deduction (but not to                  state of residence.
exceed the maximum applicable exclusion amount in effect for the
16b. Gross value of all property wherever situated
year of death).
Enter the amount of the gross estate (Part 2, line 1).
Line 12. Adjustment to unified credit (applicable
16c. Oregon percentage
Divide the amount on line 16a by the amount on line 16b.
If the decedent made gifts (including gifts made by the dece-             You should round the decimal amount to four places. You
dent’s spouse and treated as made by the decedent by reason               can convert a decimal amount to a percentage by multiply-
of gift splitting) after September 8, 1976, and before January            ing the amount by 100, or you can move the decimal two
1, 1977, for which the decedent claimed a specific exemption,             places to the right. Write the percentage on line 16c. Don’t
the unified credit (applicable credit amount) on this estate              fill in more than 100 percent or less than -0-.
tax return must be reduced. You may figure the reduction
entering 20 percent of the specific exemption claimed for
these gifts.                                                               Line 16a     Line 16b       Line 16c
Note: (The specific exemption was allowed by Section 2521 for              $888,800 &#247; $1,000,000 = 0.8888 [Round to 0.8889 (88.89%)]
gifts made before January 1, 1977.)
Line 18. Amount paid by the due date of the
If the decedent did not make any gifts between September
8, 1976, and January 1, 1977, or if the decedent made gifts
during that period but did not claim the specific exemption,              For an original Form IT-1, enter the total of prior timely pay-
enter zero.                                                               ments. If this is for an amended return, please enter the net
payments (prior payments less prior refunds) to date.
Line 15. State death tax (Oregon inheritance tax)
Line 21. Penalty due
The federal estate law has changed the calculation of the tax-
able estate on Form 706 for 2005 and after. Most figures will             A penalty of 5 percent of the tax may be imposed if the tax
not come directly from Form 706. The form 706 allows the                  is not paid and/or the return is not filed within nine months
state death tax as a deduction on the federal return. Because             from the date of death or by the extended due date. If you file
Oregon is tied to the 2000 federal estate law, we cannot allow            more than 3 months after the due date (including extension),
the calculation of the taxable estate after the state death tax           please add an additional 20 percent penalty.
deduction. You must use table B in this booklet for computa-
tion of the state death tax.                                              Line 22. Interest due
Enter the amount figured by using Table B, or the amount                  If you are filing or paying after the due date, please include
on line 14, whichever is less. The adjusted taxable estate                interest on any unpaid tax. An interest period is each full
150-103-001 (10-07)                                                   7                                                 www.oregon.gov/DOR
month starting with the day after the due date. For example,            provided it is not filed later than 1 year after the due date
April 16 to May 15 is a full month and interest period. We              (including extensions).
calculate interest daily for periods of less than a month. Inter-
If you elect alternate valuation, value the property that is
est accrues on any unpaid tax during an extension of time to
included in the gross estate as follows:
file. Here’s how to calculate the interest due:
1. Any property distributed, sold, exchanged, or other-
• Tax x Annual interest rate x Number of full years.                       wise disposed of or separated or passed from the gross
• Tax x Monthly interest rate x Number of months.                          estate by any method within 6 months after the dece-
• Tax x Daily interest rate x Number of days.                              dent’s death is valued on the date of distribution, sale,
For periods beginning        Annual      Monthly      Daily              exchange, or other disposition, whichever occurs first.
Value this property on the date it ceases to form a part
January 1, 2008                9%         0.75%      0.0247%
of the gross estate; i.e., on the date the title passes as the
January 1, 2007                9%         0.75%      0.0247%
result of its sale, exchange, or other disposition.
For periods not shown above, go to: www.oregon.gov/                     2. Any property not distributed, sold, exchanged, or oth-
DOR/PERTAX/docs/800-691.pdf.                                               erwise disposed of within the 6-month period is valued
Additional interest on deficiencies and delinquencies.                     on the date 6 months after the date of the decedent’s
Interest will increase by one-third of 1 percent per month                 death.
3. Any property, interest, or estate that is “affected by
(4 percent yearly) on deficiencies or delinquencies if the
mere lapse of time” is valued as of the date of decedent’s
death or on the date of its distribution, sale, exchange,
• You file a return showing tax due, or the Department of                  or other disposition, whichever occurs first. However,
Revenue has assessed an existing deficiency; and                         you may change the date of death value to account for
• The assessment is not paid within 60 days after the notice               any change in value that is not due to a “mere lapse of
of assessment is issued; and                                             time” on the date of its distribution, sale, exchange, or
• You have not filed a timely appeal.                                      other disposition.
Special instructions. Do you owe penalty on line 21 or inter-           The property included in the alternate valuation and valued
est on line 22 and have an overpayment on line 20? If your              as of 6 months after the date of the decedent’s death, or as of
overpayment is less than the total penalty and interest, you            some intermediate date (as described above) is the property
have an amount due. To calculate the amount due, fill in on             included in the gross estate on the date of the decedent’s
line 23 the result of line 21 plus line 22 minus line 18. If your       death. Therefore, you must first determine what property
overpayment is more than the total penalty and interest, to             constituted the gross estate at the decedent’s death.
calculate your refund, enter on line 24 the result of line 18
minus the sum of line 21 plus line 22.                                  Interest
Interest accrued to the date of the decedent’s death on bonds,
Line 23. Total due                                                      notes, and other interest-bearing obligations is property of
the gross estate on the date of death and is included in the
Enclose a check or money order for the amount due with                  alternate valuation.
your return and the payment voucher (Form IT-V). Do not
send cash or postdated checks.                                          Rent
Rent accrued to the date of the decedent’s death on leased
Part 3: Elections by the executor                                       real or personal property is property of the gross estate on
the date of death and is included in the alternate valuation.
Unless you elect at the time you file the return, to adopt
alternate valuation as authorized by Section 2032, you must             Outstanding dividends that were declared to stockholders
value all property included in the gross estate on the date of          of record on or before the date of the decedent’s death are
the decedent’s death. You may not apply alternate valuation             considered property of the gross estate on the date of death,
to only a part of the property.                                         and are included in the alternate valuation. Ordinary divi-
dends declared to stockholders of record after the date of the
You may elect special use valuation (line 2) in addition to             decedent’s death are not property of the gross estate on the
alternate valuation.                                                    date of death and are not included in the alternate valuation.
You may not elect alternate valuation unless the election will          However, if dividends are declared to stockholders of record
after the date of the decedent’s death so that the shares of
decrease both the value of the gross estate and the total net es-
stock at the later valuation date do not reasonably represent
tate and taxes due after application of all allowable credits.
the same property at the date of the decedent’s death, in-
You may elect alternate valuation by checking “Yes” on line             clude those dividends (except dividends paid from earnings
1 and filing Form IT-1. Once made, the election may not be              of the corporation after the date the decedent’s death) in the
revoked. The election may be made on a late filed Form IT-1             alternate valuation.
www.oregon.gov/DOR                                                  8                                                  150-103-001 (10-07)
As part of each Schedule A through I, you must show:                    Real property may qualify for the Section 2032A election if:
1. What property is included in the gross estate on the date            1. The decedent was a U.S. citizen or resident at the time of
of the decedent’s death;                                                death;
2. What property was distributed, sold, exchanged, or oth-              2. The real property is located in the United States;
erwise disposed of within the 6-month period after the               3. At the decedent’s death, the real property was used by
decedent’s death, and the dates of these distributions, etc.            the decedent or a family member for farming or in a trade
(These two items should be entered in the “Description”                 or business, or was rented for such use by either the sur-
column of each schedule. Briefly explain the status or                  viving spouse or a lineal descendant of the decedent to a
disposition governing the alternate valuation date, such                family member on a net cash basis;
as: “Not disposed of within 6 months following death,”               4. The real property was acquired from or passed from the
“Distributed,” “Sold,” “Bond paid on maturity,” etc. In                 decedent to a qualified heir of the decedent;
this same column, describe each item of principal and                5. The real property was owned and used in a qualified
includible income);                                                     manner by the decedent or a member of the decedent’s
3. The date of death value, entered in the appropriate value               family during five of the eight years before the decedent’s
column with items of principal and includible income                    death;
shown separately; and                                                6. There was material participation by the decedent or a
4. The alternate value, entered in the appropriate value                   member of the decedent’s family during five of the eight
column with items of principal and includible income                    years before the decedent’s death; and
shown separately. (In the case of any interest or estate,            7. The qualified property meets the following percentage
the value of which is affected by lapse of time, such as                requirements:
patents, leaseholds, estates for the life of another, or re-
mainder interests, the value shown under the heading                    a. At least 50 percent of the adjusted value of the gross
“Alternate value” must be the adjusted value; i.e., the                    estate must consist of the adjusted value of real or
value as of the date of death with an adjustment reflecting                personal property that was being used as a farm or in
any difference in its value as of the later date not due to                a closely held business and that was acquired from,
lapse of time.)                                                            or passed from, the decedent to a qualified heir of the
decedent, and
Distributions, sales, exchanges, and other dispositions of
the property within the 6-month period after the decedent’s                b. At least 25 percent of the adjusted value of the gross
death must be supported by evidence. If the court issued an                   estate must consist of the adjusted value of qualified
order of distribution during that period, you must submit                     farm or closely held business real property.
a certified copy of the order as part of the evidence. The              For this purpose, adjusted value is the value of property
department may require you to submit additional evidence
determined without regard to its special-use value. The
value is reduced for unpaid mortgages on the property or
If the alternate valuation method is used, the values of life es-       any indebtedness against the property, if the full value of
tates, remainders, and similar interests are figured using the          the decedent’s interest in the property (not reduced by such
age of the recipient on the date of the decedent’s death and            mortgage or indebtedness) is included in the value of the
the value of the property on the alternate valuation date.              gross estate. The adjusted value of the qualified real and per-
sonal property used in different businesses may be combined
Line 2. Special use valuation of Section 2032A                          to meet the 50 percent and 25 percent requirements.
Under Section 2032A, you may elect to value certain farm                Qualified real property—Qualified use
and closely held business real property at its farm or busi-
ness use value rather than its fair market value. You may               The term “qualified use” means the use of the property as a
elect both special use valuation and alternate valuation.               farm for farming purposes or the use of property in a trade
or business other than farming. Trade or business applies
To elect this valuation, you must check “Yes” on line 2 and             only to the active conduct of a business. It does not apply to
complete and attach Schedule A-1 and its required additional            passive investment activities or the mere passive rental of
statements. You must file Schedule A-1 and its required at-             property to a person other than a member of the decedent’s
tachments with Form IT-1 for this election to be valid. You             family. Also, no trade or business is present in the case of
may make the election on a late filed return so long as it is           activities not engaged in for profit.
the first return filed.
The decrease in the value of property per Section 2032A will            Ownership
not exceed $750,000 and will be indexed for inflation each              To qualify as special-use property, the decedent or a member
year. For deaths in 2006, the maximum decrease allowed was              of the decedent’s family must have owned and used the
$900,000. For deaths on or after January 1, 2007, IRS has not           property in a qualified use for five of the last eight years
yet released the indexed amount. Please refer to the Form               before the decedent’s death. Ownership may be direct or
706 instructions upon publication.                                      indirect through a corporation, a partnership, or a trust.
150-103-001 (10-07)                                                 9                                               www.oregon.gov/DOR
If the ownership is indirect, the business must qualify as a            A legally adopted child of an individual is treated as a child
closely held business under Section 6166. The ownership,                of that individual by blood.
when combined with periods of direct ownership, must
meet the requirements of Section 6166 on the date of the                Material participation
decedent’s death and for a period of time that equals at least          To elect special-use valuation, either the decedent or a mem-
five of the eight years preceding death.                                ber of his or her family must have materially participated in
If the property was leased by the decedent to a closely held            the operation of the farm or other business for at least five of
the eight years ending on the date of the decedent’s death.
business, it qualifies as long as the business entity to which
The existence of material participation is a factual determi-
it was rented was a closely held business with respect to the
nation, but passively collecting rents, salaries, draws, divi-
decedent on the date of the decedent’s death and for suffi-
dends, or other income from the farm or other business does
cient time to meet the “five in eight years” test property.
not constitute material participation. Neither does merely
advancing capital and reviewing a crop plan and financial
Structures and other real property improvements
reports each season or business year.
Qualified real property includes residential buildings and
structures and real property improvements regularly occu-               In determining whether the required participation has oc-
pied or used by the owner or lessee of real property (or by             curred, disregard brief periods (e.g., 30 days or less) during
the employees of the owner or lessee) to operate the farm               which there was no material participation, as long as such
or business. A farm residence which the decedent had oc-                periods were both preceded and followed by substantial
periods (more than 120 days) during which there was unin-
cupied is considered to have been occupied for the purpose
terrupted material participation.
of operating the farm even when a family member and not
the decedent was the person materially participating in the
If, on the date of death, the time period for material partici-
Qualified real property also includes roads, buildings, and             pation could not be met because the decedent had retired or
other structures and improvements functionally related to               was disabled, a substitute period may apply. The decedent
the qualified use.                                                      must have retired on Social Security or been disabled for a
Elements of value such as mineral rights that are not related           continuous period ending with death. A person is disabled
to the farm or business use are not eligible for special-use            for this purpose if he or she was mentally or physically un-
valuation.                                                              able to materially participate in the operation of the farm or
Property acquired from the decedent                                     The substitute time-period for material participation for
Property is considered to have been acquired from or to have            these decedents is a period totaling at least five years out of
passed from the decedent if one of the following applies:               the eight-year period that ended on the earlier of:
• The property is considered to have been acquired from or              1. The date the decedent began receiving Social Security
to have passed from the decedent under Section 1014(b)                   benefits, or
(relating to basis of property acquired from a decedent).             2. The date the decedent became disabled.
• The property is acquired by any person from the estate.
• The property is acquired by any person from a trust, to the           Surviving spouse
extent the property is includible in the gross estate.                A surviving spouse who received qualified real property
from a predeceased spouse is considered to have materially
Qualified heir                                                          participated if he or she was engaged in the active manage-
ment of the farm or other business. If the surviving spouse
A person is a qualified heir of property if he or she is a mem-
died within eight years of the first spouse’s death, you may
ber of the decedent’s family and acquired or received the
add the period of material participation of the predeceased
property from the decedent. If a qualified heir disposes of
spouse to the period of active management by the surviv-
any interest in qualified real property to any member of his
ing spouse to determine if the surviving spouse’s estate
or her family, that person will then be treated as the qualified
qualifies for special-use valuation. To qualify for this, the
heir with respect to that interest.
property must have been eligible for special-use valuation
The term member of the family includes only:                            in the predeceased spouse’s estate, though it does not have
to have been elected by that estate.
• An ancestor (parent, grandparent, etc.) of the individual;
• The spouse of the individual;                                         For additional details regarding material participation, see
• The lineal descendant (child, stepchild, grandchild, etc.) of         federal Regulations Section 20.2032A-3(e).
the individual, the individual’s spouse, or a parent of the
individual; or                                                        Valuation methods
• The spouse, widow, or widower of any lineal descendant                The primary method of valuing special–use value property
described above.                                                      that is used for farming purposes is the annual gross cash
www.oregon.gov/DOR                                                 10                                                  150-103-001 (10-07)
rental method. If comparable gross cash rentals are not                 • Number, types, and conditions of all buildings and other
available, you can substitute comparable average annual                   fixed improvements located on the properties and their
net share rentals. If neither of these are available, or if you           location as they affect efficient management, use, and
so elect, you can use the method for valuing real property                value of the property.
in a closely held business.                                             • Availability and type of transportation facilities in terms of
costs and of proximity of the properties to local markets.
Average annual gross cash rental
You must specifically identify on the return the property
Generally, the special–use value of property that is used for
being used as comparable property. Use the type of descrip-
farming purposes is determined as follows:
tions used to list real property on Schedule A.
1. Subtract the average annual state and local real estate
taxes on actual tracts of comparable real property from              Net share rental
the average annual gross cash rental for that same com-
You may use average annual net share rental from compa-
parable property, and
rable land only if there is no comparable land from which
2. Divide the result on line 1 by the average annual effec-
average annual gross cash rental can be determined. Net
tive interest rate charged for all new Federal Land Bank
share rental is the difference between the gross value of pro-
duce received by the lessor from the comparable land and
The computation of each average annual amount is based on               the cash operating expenses (other than real estate taxes) of
the five most recent calendar years ending before the date of           growing the produce that, under the lease, are paid by the
the decedent’s death.                                                   lessor. The production of the produce must be the business
purpose of the farming operation. For this purpose, produce
Gross cash rental                                                       includes livestock.
Generally, gross cash rental is the total amount of cash
received in a calendar year for the use of actual tracts of             The gross value of the produce is generally the gross amount
comparable farm real property in the same locality as the               received if the produce was disposed of in an arm’s-length
property being specially valued. You may not use apprais-               transaction, within the period established by the Department
als or other statements regarding rental value or area-wide             of Agriculture for its price support program. Otherwise, the
averages of rentals. You may not use rents that are paid                value is the weighted average price for which the produce
wholly or partly in kind, and the amount of rent may not be             sold on the closest national or regional commodities market.
based on production. The rental must have resulted from an              The value is figured for the date or dates on which the lessor
arm’s–length transaction. Do not reduce the amount of rent              received (or constructively received) the produce.
by the amount of any expenses or liabilities associated with
the farm operation or the lease.                                        Valuing a real property interest in closely held business
Use this method to determine the special-use valuation for
Comparable property                                                     qualifying real property used in a trade or business other
Comparable property must be situated in the same locality               than farming. You may also use this method for qualify-
as the specially valued property as determined by generally             ing farm property if there is no comparable land or if you
accepted real property valuation rules. The determination of            elect to use it. Under this method, the following factors
comparability is based on all the facts and circumstances. It           are considered:
is often necessary to value land in segments where there are
different uses or land characteristics included in the specially        • The capitalization of income that the property can be
valued land. The following list contains some of the factors              expected to yield for farming or for closely held business
considered in determining comparability.                                  purposes over a reasonable period of time with prudent
management and traditional cropping patterns for the
• Similarity of soil.
area, taking into account soil capacity, terrain configura-
• Whether the crops grown would deplete the soil in a simi-
tion, and similar factors.
• The capitalization of the fair rental value of the land for
• Types of soil conservation techniques that have been prac-
ticed on the compared properties.                                       farming or for closely held business purposes.
• Whether the compared properties are subject to flood-                 • The assessed land values in a state that provides a differ-
ing.                                                                    ential or use value assessment law for farmland or closely
• Slope of the land.                                                      held business.
• For livestock operations, the carrying capacity of the                • Comparable sales of other farm or closely held business
land.                                                                   land in the same geographical area far enough removed
• For timbered land, whether the timber is comparable.                    from a metropolitan or resort area so that nonagricultural
• Whether the property as a whole is unified or segmented;                use is not a significant factor in the sales price.
if segmented, the availability of the means necessary for             • Any other factor that fairly values the farm or closely held
movement among the different sections.                                  business value of the property.
150-103-001 (10-07)                                                11                                               www.oregon.gov/DOR
Making the election                                                       amended return using special use values under the rules of
Include the words “Section 2032A valuation” in the “De-                   Section 2032A, and complete Schedule A-1 and attach all of
scription” column of any Form 706 schedule if Section 2032A               the required statements.
property is included in the decedent’s gross estate.                      For more information about special use valuation please see
An election under Section 2032A does not need to include                  Section 2032A.
all the property in an estate that is eligible for special use            If the 2032A special use valuation is a separate election for
valuation, but sufficient property to satisfy the threshold               Oregon purposes, you must attach a copy of Schedule A-1
requirements of Section 2032A(b)(1)(B) must be specially                  marked, “For Oregon only.” If you file a federal return, ex-
valued under the election.                                                plain differences between the federal return and the Oregon
If joint or undivided interests (e.g., interests as joint tenants         return.
or tenants in common) in the same property are received
from a decedent by qualified heirs, an election with respect              Line 3. Installment payments
to one heir’s joint or undivided interest does not need to
If the gross estate includes an interest in a closely held
include any other heir’s interest in the same property if the
business, and on Form IT-1 you have made an election
electing heir’s interest plus other property to be specially
under Section 6166, we will follow the federal guidelines.
valued satisfies the requirements of Section 2032A(b)(1)(B).
For more information about federal estate tax installment
If successive interests (e.g., life estates and remainder inter-          payments allowed, if the estate has interest in a closely held
ests) are created by a decedent in otherwise qualified prop-              business, please see Section 6166.
erty, an election under Section 2032A is available only with
You may be able to pay the Oregon Inheritance tax in install-
respect to that property (or part) in which qualified heirs of
ments under ORS 118.225.
the decedent receive all of the successive interests, and such
an election must include the interests of all of those heirs.
For example, if a surviving spouse receives a life estate in oth-         According to OAR 118.225, for the Oregon Department of
erwise qualified property and the spouse’s brother receives               Revenue to agree to an installment payment of tax, the fol-
a remainder interest in fee, no part of the property may be               lowing must occur:
valued pursuant to an election under Section 2032A.
1. Collateral acceptable to the Department of Revenue must
Where successive interests in specially valued property are                  be provided. For real property, a first mortgage, having a
created, remainder interests are treated as being received by                value of double the extended tax. For personal property,
qualified heirs only if the remainder interests are not contin-              a surety bond in double the amount of the extended tax,
gent on surviving a non-family member or are not subject to                  executed by a corporation licensed to do business in the
divestment in favor of a non-family member.                                  State of Oregon. The bond must be renewed every five
Protective election                                                       2. Executor is personally liable for payment of the tax.
You may make a protective election to specially value                     3. No annual statements will be sent to the executor.
qualified real property. Under this election, whether or                  4. If payments are not made timely, the remaining liability
not you may ultimately use special use valuation depends                     is due and owing.
upon values as finally determined (or agreed to following                 5. Interest on the Oregon inheritance tax accumulates from
examination of the return) meeting the requirements of                       the day after the due date of the original return, to the date
Section 2032A.                                                               your payment is received. If the tax is not paid within 60
To make a protective election, check “Yes” to line 2 and                     days of our bill, the interest rate increases by 4 percent per
complete Schedule A-1 according to its instructions for                      year and is subject to annual change. ORS 118.260
“Protective election.”                                                    6. For Oregon, a special interest rate does not apply to
If you make a protective election, you should complete this
Form IT-1 by valuing all property at its fair market value.               You do not need to furnish the required mortgage or bond
Do not use special use valuation. Usually, this will result               at the time you file Form IT-1. The department will contact
in higher estate tax liabilities than will be ultimately deter-           you and you will be given the opportunity to furnish the
mined if special use valuation is allowed. The protective                 collateral.
election does not extend the time to pay the taxes shown                  Important: The interest paid on installment payments is not
on the return.                                                            deductible as an administrative expense of the estate.
If it is found that the estate qualifies for special use valuation
based on the values as finally determined (or agreed to fol-              Making the Section 6166 election
lowing examination of the return), you must file an amended               If you check this line to make a protective election, you
Form IT-1 (with a complete Section 2032A election) within                 should attach a notice of protective election as described in
60 days after the date of this determination. Complete the                Regulations Section 20.6166-1(d). If you check this line to
www.oregon.gov/DOR                                                   12                                                  150-103-001 (10-07)
make final election, you should attach the notice of election         inheritance taxes paid (or payable) relating to the benefits
described in Regulations Section 20.6166-1(b).                        received by the beneficiaries listed on lines 2 and 3.
For information on the acceleration of payment when an                All distributions of less than $5,000 to specific beneficiaries
interest in the closely held business is disposed of, see Sec-        may be included with distributions to unascertainable ben-
tion 6166(g).                                                         eficiaries on the line provided.
Line 4. Reversionary or remainder interests                           Line 4. Section 2044 property
For details of this election, see Section 6163 and the related        If you answered “Yes,” these assets must be shown on
regulations.                                                          Schedule F.
Section 2044 property is property for which a previous Sec-
Part 4: General information                                           tion 2056(b)(7) election (Qualified Terminable Interest Prop-
erty, or QTIP election) has been made, or for which a similar
Line 2. Surviving spouse                                              gift tax election (Section 2523) has been made. For more
information, see the instructions on the back of Schedule F.
Complete line 2 whether or not there is a surviving spouse
and whether or not the surviving spouse received any ben-
Line 6. Insurance not included in the gross estate
efits from the estate. If there was no surviving spouse on the
date of decedent’s death, enter “None” in line 2a and leave           If you checked “Yes” for either 6a or 6b, you must complete
lines 2b and 2c blank. The value entered in line 2c does not          and attach Schedule D and attach a Form 712, Life Insurance
need to be exact. See the instructions for “Amount” under             Statement, for each policy and an explanation of why the
line 3.                                                               policy or its proceeds are not includible in the gross estate.
Line 3. Beneficiaries information                                     Line 8. Partnership interests and stock in close
If you answered “Yes” to line 8, you must include full details
Enter the name of each individual, trust, or estate who re-           for partnerships and unincorporated businesses on Schedule
ceived (or will receive) benefits of $5,000 or more from the          F (Schedule E if the partnership interest is jointly owned).
estate directly as an heir, next-of-kin, devisee, or legatee;         You must include full details for the stock of inactive or close
or indirectly (for example, as beneficiary of an annuity or           corporations on Schedule B.
insurance policy, shareholder of a corporation, or partner of
a partnership that is an heir, etc.).                                 Value these interests using the federal Regulations Section
20.2031-2 (stocks) or 20.2031-3 (other business interests).
Identifying number                                                    A “close corporation” is a corporation whose shares a limited
Enter the SSN of each individual beneficiary listed. If the           number of shareholders own. Often, one family holds the
number is unknown, or the individual has no number, please            entire stock issue. As a result, little, if any, trading of the stock
indicate “unknown” or “none.” For trusts and other estates,           takes place. There is, therefore, no established market for the
enter the federal employer identification number (FEIN).              stock, and those sales that do occur are at irregular intervals
and seldom reflect all the elements of a representative trans-
Relationship                                                          action as defined by the term “fair market value” (FMV).
For each individual beneficiary, enter the relationship (if
known) to the decedent by reason of blood, marriage, or               Line 10. Trusts
adoption. For trust or estate beneficiaries, indicate TRUST           If you answered “Yes” to either 10a or 10b, you must attach
or ESTATE.                                                            a copy of the trust instrument for each trust. You must com-
plete Schedule G if you answered “Yes” to 10a and Schedule
Amount                                                                F if you answered “Yes” to 10b.
Enter the amount actually distributed (or to be distributed)
to each beneficiary including transfers during the decedent’s         Line 12. Transitional marital deduction computa-
life from Schedule G required to be included in the gross             tion
estate. The value to be entered does not need to be exact. A
reasonable estimate is sufficient. For example, where precise         Check “Yes” if property passes to the surviving spouse un-
values cannot readily be determined, as with certain future           der a maximum marital deduction formula provision that
interests, a reasonable approximation should be entered.              meets the requirements of Section 403(e)(3) of the Economic
Recovery Tax Act of 1981 (P.L. 97-34; 95 Stat. 305).
The total of these distributions should approximate the
amount of gross estate reduced by funeral and administra-             If you check “Yes” to line 12, compute the marital deduc-
tive expenses, debts and mortgages, bequests to surviving             tion under the rules that were in effect before the Economic
spouse, charitable bequests, and any federal estate and state         Recovery Tax Act of 1981.
150-103-001 (10-07)                                              13                                                   www.oregon.gov/DOR
For a format for this computation, you should obtain the              on line 12, part 5. This new schedule is available on our
November 1981 revision of Form 706 and its instructions.              website at www.oregon.gov/DOR.
The computation is lines 19 through 26 of the Recapitulation.
Please see HB 3201, sections 67, 68, and 69, for specific infor-
You should also apply the rules of Revenue Ruling 80-148,
1980-1 C.B. 207, if there is property that passes to the sur-         mation about this exclusion on our website: www.oregon.
viving spouse outside of the maximum marital deduction                gov/DOR/BUS/docs/HB3201_67-69.pdf or www.leg.state.
formula provision.                                                    or.us/07reg/measpdf/hb3200.dir/hb3201.en.pdf.
At the time we published these instructions, the Department
Part 5: Recapitulation                                                of Revenue is looking for guidance on the types of property
that qualify for the exclusion. If you have natural resource
property or commercial fishing property, you may request a
Lines 1 through 10—Gross Estate: You must make an entry               six-month extension of time to file. We hope to have clarifica-
on each line 1 through 9.                                             tion on the types of property which qualify in 2008.
If the gross estate does not contain any assets of the type           As we have more information available on HB 3201, we will
specified by a given item, enter zero on that line. Entering          post it on our website at: www.oregon.gov/DOR.
zero on any lines 1 through 9 is a statement by the executor,
made under penalties of perjury, that the gross estate does
Lines 14 through 23. Deductions
not contain any includible assets covered by that line.
You must attach the appropriate schedules for the deduc-
Do not enter any amounts in the “Alternate value” column
tions you claim.
unless you elected alternate valuation on line 1 of Elections
by the Executor on page 2 of the Form IT-1.
Which schedules to attach for lines 1 through 9. You must
attach:                                                               If line 17 is less than or equal to the value (at the time of the
decedent’s death) of the property subject to claims, enter the
• Schedule F and answer its questions even if you report no           amount from line 17 on line 18.
• Schedules A, B, and C if the gross estate includes any real         If the amount on line 17 is more than the value of the prop-
estate; stocks and bonds; or mortgages, notes, and cash, re-        erty subject to claims, enter the greater of (a) the value of the
spectively.                                                         property subject to claims, or (b) the amount actually paid
• Schedule D if the gross estate includes any life insurance          at the time the return is filed.
or if you answered “Yes” to question 6a of Part 4—General
Do not enter more on line 18, than the amount on line 17. See
• Schedule E if the gross estate contains any jointly owned           Section 2053 and the related regulations for more informa-
property or if you answered “Yes” to question 7 of Part 4.          tion.
• Schedule G if the decedent made any of the lifetime trans-
fers to be listed on that schedule or if you answered “Yes”         Line 21
to question 9 or 10a of Part 4.
If the marital deduction is a separate election for Oregon
• Schedule H if you answered “Yes” to question 11 of Part 4.
purposes, you must attach a copy of Schedule M marked,
• Schedule I if you answered “Yes” to question 13 of Part 4.
“For Oregon only.”
Line 11. Conservation easement exclusion                              List each property interest included in the gross estate that
passes to the surviving spouse and for which a marital de-
You must complete and attach Schedule U (along with any               duction is claimed. This includes otherwise nondeductible
required attachments) to claim the exclusion on this line.
terminable interest property for which you are making a
QTIP election. Number each item in sequence, describe it
Line 12. Natural resource property and commer-                        in detail, and specify the schedule and item number where
cial fishing operation exclusion                                      each was entered for the gross estate.
House Bill 3201 provides for an Oregon only exclusion from            Unless you specifically identify a fractional portion of the
the gross estate of a decedent for natural resource property,         trust or other property as not subject to the election, the
not to exceed $7.5 million. Natural resource property is farm         election will be considered made for all the trust or other
use and forestland, as defined in Oregon Revised Statutes             property.
308A.056, 308A.250, and 321.201. In addition, the exclusion
applies to property used in commercial fishing operations.            A return for a resident decedent must include any property
The exclusion applies to deaths on or after January 1, 2007.          in an Oregon only QTIP created upon the prior death of their
spouse, valued as of the date of the second spouse’s death.
To claim this exclusion you must complete Oregon Schedule
NRE, and attach the schedule to your Form IT-1. Enter the             If you filed a federal return, explain the differences between
natural resource or commercial fishing property exclusion             the federal and Oregon returns.
www.oregon.gov/DOR                                               14                                                  150-103-001 (10-07)
Line 23                                                              tion that your envelope was received, you may send it by
The qualified family-owned business interest (QFOBI) de-
duction was repealed by federal law for the estates of dece-         Private delivery services require the physical address:
dents who died after December 31, 2003. However, Oregon
is tied to federal law in effect as of December 31, 2000. You
may claim a QFOBI for Oregon only by using Schedule T.
This schedule is available on our website at www.oregon.                 Salem OR 97301-2555
gov/DOR.                                                             The private delivery service can tell you how to get written
Executor’s signatures and SSNs                                       Taxpayer assistance
The executors who file the return must sign the declaration
on page 3 under penalties of perjury, per ORS 118.990. List
the other executors’ names, titles (personal representative,         • Download forms and publications.
trustee, etc.), addresses, telephone numbers, and SSNs on
• Get up-to-date tax information.
an attached sheet. Please notify us of a change of address
• E-mail: estate.help.dor@state.or.us.
or telephone numbers for the executor(s) or authorized
representative.                                                         This e-mail address is not secure and confidentiality cannot be
ensured. General tax and policy questions only.
ORS 305.100 and Section 405, Title 42, of the United States
Code, authorizes requests for SSNs. You must give us this
information. It will be used to establish both the decedent’s         Telephone
and executor’s identities.
Salem ..................................................................... 503-378-4988
Authorization                                                        Toll-free from Oregon prefix ........................... 1-800-356-4222
If you want to authorize the preparer to be able to talk to          Call one of the numbers above to hear recorded tax informa-
us, you may check the box located between the signature              tion or order tax forms.
lines for the executor(s) and the preparer. If you want to
For help from Tax Services, call one of the help numbers:
authorize a person other than the preparer, please attach a
signed Tax Information Authorization and Power of Attorney           Monday through Friday.......................................7:30 a.m.–5:00 p.m.
for Representation (POA) form. This form can be obtained on          Closed Thursdays from 9:00 a.m.–11:00 a.m. Closed on holidays.
our website or you may contact us to have it mailed to you.          Extended hours during tax season: Wait times may vary.
Please notify us of a change of address or telephone numbers
Asistencia en espa&#241;ol:
for the executor(s) or authorized representative.
Salem...................................................................503-378-4988
Gratis de prefijo de Oregon ..........................1-800-356-4222
If someone other than the executor prepares the return,              TTY (hearing or speech impaired; machine only):
that name, title, telephone number, and address must be               Salem...................................................................503-945-8617
provided.                                                             Toll-free within Oregon .................................1-800-886-7204
Where to File                                                        numbers for information in alternative formats.
Oregon Department of Revenue                                        Correspondence
Salem OR 97309-0910                                                Include the estate’s BIN or the decedent’s SSN and a daytime
telephone number for faster service.
The department does not acknowledge the receipt of the
return or payments. Please do not send self-addressed en-            Write to: Estate Audit, Business Division, Oregon Depart-
velopes for acknowledgements. If you would like verifica-            ment of Revenue, PO Box 14110, Salem OR 97309-0910.
150-103-001 (10-07)                                             15                                                                 www.oregon.gov/DOR
www.oregon.gov/DOR   16   150-103-001 (10-07)
Oregon                                                                                                   Date Received
Form                                                                                                                Year of Death                   •
• IT-1   (120)
Tax Return                                                         •                                    •
BIN                     Clear form
For deaths on or after January 1, 2006                                                                                      •
Part 1 (Please print or type.)
Decedent’s First Name, Middle Initial, and Last Name                                                                                                                    Decedent’s Social Security Number
Date of Death                                    Decedent’s Domicile (legal residence)—City, County, State, Country                                                                          Year Domicile Established
Is the estate being probated in Oregon?                                                                                                            An extension of time to file is attached.
Yes          If Yes— Oregon county:                                                                                                         An extension of time to pay is attached.
No                   Oregon probate number:                                                                                                 The attached copy of Form 706 was filed with the IRS.
This is an amended return.
A separate election is claimed.
Executor’s Name                                                                                                                                                Daytime Telephone Number
Executor’s Mailing Address                                                                                                   City                                          State          ZIP Code
Part 2—Tax computation                                                                                                                  Round all amounts to the nearest whole dollar.
1. Total gross estate less exclusion (from page 3, Part 5, line 13) ....................................................................................... 1.
2. Total allowable deductions (from page 3, Part 5, line 24)................................................................................................. 2.
3. Taxable estate (subtract line 2 from line 1) ....................................................................................................................... 3.
4. Adjusted taxable gifts [total taxable gifts (within the meaning of Section 2503) made by the decedent after
December 31, 1976, other than gifts that are includible in decedent’s gross estate (Section 2001[b])] ......................... 4.
5. Add lines 3 and 4 ............................................................................................................................................................. 5.
6. Tentative tax on the amount on line 5 above; (see instructions) ..................................................................................... 6.
7. a. If line 5 exceeds $10,000,000, enter the lesser of line 5 or $17,184,000.
If line 5 is $10,000,000 or less, skip lines 7a and 7b and enter -0- on line 7c .......... 7a.
b. Subtract $10,000,000 from line 7a ...................................................................7b.
c. Enter 5% (0.05) of line 7b ............................................................................................................................... 7c.
8. Total tentative tax (add lines 6 and 7c) ............................................................................................................................ 8.
9. Total gift tax payable with respect to gifts made by the decedent after December 31, 1976. Include gift taxes
by the decedent’s spouse for such spouse’s share of split gifts (Section 2513) only if the decedent was the donor
of these gifts and they are includible in the decedent’s gross estate .............................................................................. 9.
10. Gross estate tax (subtract line 9 from line 8) ............................................................................................................... 10.
11. Maximum unified credit (applicable credit amount) against estate tax ....................... 11.
12. Adjustment to unified credit (applicable credit amount) (this adjustment
may not exceed $6,000).............................................................................................. 12.
13. Allowable unified credit (applicable credit amount) (subtract line 12 from line 11) ..................................................... 13.
14. Subtract line 13 from line 10 (but do not enter less than zero) ................................................................................... 14.
15. State death tax (see instructions). Do not enter more than line 14 ............................................................................. 15.
16. Proration of state death tax (complete only if there is property located in states other than Oregon):
a. Gross value, for federal estate tax purposes, of property located in Oregon (identify on attached copy of
the federal schedules by highlighting) ...................................................................................................................16a.
b. Gross value of decedent’s estate for federal estate tax purposes .........................................................................16b.
c. Percent of estate located in Oregon (line 16a divided by line 16b, round decimal to four places) .........................16c.                                                          __ __ __ . __ __ %
17. Tax payable to Oregon (line 15 multiplied by line 16c, or amount from line 15 if no entry on line 16c) ....................... 17.
18. Amount paid by the due date of return ........................................................................................................................ 18.
19. Tax due. Is line 17 more than line 18? If so, line 17 minus line 18 ..............................................................TAX DUE 19.
20. Overpayment. Is line 18 more than line 17? If so line 18 minus line 17 ......................................... OVERPAYMENT 20.
21. Penalty due................................................................................................................................................................... 21.
22. Interest due .................................................................................................................................................................. 22.
23. Total due (add lines 19, 21, and 22) ...................................................................................................... TOTAL DUE 23.
24. Refund (line 20 minus lines 21 and 22) ....................................................................................................... REFUND 24.
150-103-001 (10-07)                                                                                                                                                                                  Form IT–1, page 1 of 3
Part 3—Elections by the executor                                                                      Check the “Yes” or “No” box for each question. See instructions on page 8.
1.Do you elect alternate valuation? .........................................................................................................................................................1.              Yes          No
2.Do you elect special use valuation? If &quot;Yes,&quot; you must complete and attach Schedule A-1 ..............................................................2.                                                   Yes          No
3.Do you elect to pay the taxes in installments as described in section 6166? If &quot;Yes,&quot; you must attach additional information;
see instructions on page 12.................................................................................................................................................................3.             Yes          No
4.Do you elect to postpone the part of the taxes attributable to a reversionary or remainder of interest as described
in section 6163? ..................................................................................................................................................................................4.      Yes          No
Part 4—General information                                                 Attach the necessary supplemental documents. You must attach the death certificate. See instructions on page 13.
1. Marital status of the decedent at time of death:
Widow or widower— Name of deceased spouse:                                                                                                        SSN of deceased spouse:
Date of death of deceased spouse:
Divorced—Date divorce decree became final:
2. a. Surviving spouse’s name:
b. Surviving spouse’s Social Security number:
c. Amount received (see instructions on page 13):
3. Individuals (other than the surviving spouse), trusts, or other estates who receive benefits from the estate (do not include charitable beneficiaries
shown in schedule O) (see instructions). For Privacy Act Notice (applicable to individual beneficiaries only), see the instructions for Form 1040.
Name of individual, trust, or estate receiving $5,000 or more                                       Identifying number               Relationship to decedent               Amount (see instructions)
All unascertainable beneficiaries and those who receive less than $5,000 ......................................................................
Total ............................................................................................................................................................................... 3
Check the “Yes” or “No” box for each question.
4. Does the gross estate contain any section 2044 property [qualified terminable interest property (QTIP) from a prior gift or
estate]? See instructions on page 13 ...............................................................................................................................................4.                  Yes           No
5. a. Have federal gift tax returns ever been filed? ............................................................................................................................5a.                       Yes           No
If &quot;Yes,&quot; please attach copies of the returns, if available, and furnish the following information:
b. Period(s) covered:                               c. Internal Revenue office(s) where filed:
If you answer “Yes” to any of questions 6–14, you must attach additional information as described in the instructions.
6. a. Was there any insurance on the decedent’s life that is not included on the return as part of the gross estate? ......................6a.                                                            Yes           No
b. Did the decedent own any insurance on the life of another that is not included in the gross estate? ..................................... 6b.                                                       Yes           No
7. Did the decedent at the time of death own any property as a joint tenant with right of survivorship in which (a) one or more
of the other joint tenants was someone other than the decedent’s spouse, and (b) less than the full value of the property is
included on the return as part of the gross estate? If &quot;Yes,&quot; you must complete and attach Schedule E .......................................7.                                                        Yes           No
8. Did the decedent, at the time of death, own any interest in a partnership or unincorporated business or any stock in an
inactive or closely held corporation? ................................................................................................................................................8.               Yes           No
9. Did the decedent make any transfer described in section 2035, 2036, 2037, or 2038 (see the instructions for Schedule G)?
If “Yes,” you must complete and attach Schedule G........................................................................................................................9.                            Yes           No
10. Were there in existence at the time of the decedent’s death:
a. Any trusts created by the decedent during his or her lifetime? ...............................................................................................10a.                                  Yes           No
b. Any trusts not created by the decedent under which the decedent possessed any power, beneficial interest, or trusteeship? . 10b.                                                                    Yes           No
Form IT–1, page 2 of 3                                                                                                                                                                                    150-103-001 (10-07)
Part 4—General information (continued)                                                                                                                   Check the “Yes” or “No” box for each question.
11. Did the decedent ever possess, exercise, or release any general power of appointment? If “Yes,” you must complete and
attach Schedule H ..........................................................................................................................................................................11.        Yes          No
12. Was the marital deduction computed under the transitional rule of Public Law 97-34, section 403(e)(3) (Economic
Recovery Act of 1981)? If “Yes,” attach a separate computation of the marital deduction, enter the amount on part 5,
line 21, and note on line 21 “computation attached” .....................................................................................................................12.                           Yes          No
13. Was the decedent, immediately before death, receiving an annuity described in the “General” paragraph of the instructions
for Schedule I? If “Yes,” you must complete and attach Schedule I ..............................................................................................13.                                    Yes          No
14. Was the decedent ever the beneficiary of a trust for which a deduction was claimed by the estate of a pre-deceased
spouse under section 2056(b)(7) and which is not reported on this return? If “Yes,” attach an explanation .................................14.                                                         Yes          No
Part 5—Recapitulation                                                                                                                    Round all amounts to the nearest whole dollar.
Gross Estate                                                                                                                                     Alternate Value                        Value at Date of Death
1. Schedule A—Real estate................................................................................................1.
2. Schedule B—Stocks and bonds ....................................................................................2.
3. Schedule C—Mortgages, notes, and cash ....................................................................3.
4. Schedule D—Insurance on the decedent’s life [attach Form(s) 712] .............................4.
5. Schedule E—Jointly owned property [attach Form(s) 712 for life insurance] ................5.
6. Schedule F—Other miscellaneous property [attach Form(s) 712 for life insurance] ......6.
7. Schedule G—Transfers during decedent’s life [attach Form(s) 712 for life insurance] .....7.
8. Schedule H—Powers of appointment ............................................................................8.
9. Schedule I—Annuities ....................................................................................................9.
10. Total gross estate (add lines 1 through 9) ................................................................. 10.
11. Schedule U—Qualified conservation easement exclusion........................................ 11.
12. Oregon only Schedule NRE—See instructions ............................................................ 12.
13. Total gross estate less exclusion (subtract lines 11 and 12 from line 10).
Enter here and on line 1 of part 2.............................................................................. 13.
Deductions                                                                                                                                                                                            Amount
14. Schedule J—Funeral expenses and expense incurred in administering property subject to claims ..........................14.
15. Schedule K—Debts of the decedent...........................................................................................................................15.
16. Schedule K—Mortgages and liens ..............................................................................................................................16.
17. Total of lines 14 through 16 .........................................................................................................................................17.
18. Allowable amount of deductions from line 17 (see instructions) .................................................................................18.
19. Schedule L—Net losses during administration ...........................................................................................................19.
20. Schedule L—Expenses incurred in administering property not subject to claims ......................................................20.
21. Schedule M—Bequests, etc., to surviving spouse .....................................................................................................21.
22. Schedule O—Charitable, public, and similar gifts and bequests ................................................................................22.
23. Schedule T—Qualified family-owned business interest deduction .............................................................................23.
24. Total deductions (add lines 18 through 23) (Enter here and on line 2 of part 2) ........................................................24.
Part 6—Signatures
Under penalties of false swearing, I declare that I have examined this return, including accompanying schedules and statements. To the best of my
knowledge and belief it is true, correct, and complete. If prepared by a person other than the executor, this declaration is based on all information of
which the preparer has any knowledge.
Signature of Executor                                                   Title                                                       Executor’s Social Security Number                     Date
Check the box to authorize the following individual(s) to receive and provide confidential tax information relating to the decedent and the estate:
Name of Preparer                                                                 Title                                                                      Telephone Number
Mailing Address                                                                                          City                                               State             ZIP Code
Please Attach a Complete Copy of Your Federal Form, Schedules, and Supporting Documents
Mail to: Oregon Department of Revenue, PO Box 14110, Salem OR 97309-0910
150-103-001 (10-07)                                                                                                                                                                                    Form IT–1, page 3 of 3