Oregon Inheritance Tax

Taxable Property, Exemptions, Deductions and Filing

Oregon is one of the states that charge an inheritance tax. This is a tax on the heirs or beneficiaries of property transfers from an estate. It is different from the federal and state estate taxes, which are levied on the estate. In Oregon, the inheritance tax applies when a decedent's estate has a taxable value of over $1,000,000. Inheritance tax rates range from 0.8% to 16% depending on the value of the estate.

Taxable property

The property subject to the Oregon inheritance tax depends on whether the decedent was a resident or nonresident of Oregon. For an Oregon resident, real and tangible personal property located in Oregon and intangible personal property wherever located is subject to the inheritance tax, after taking into account the $1,000,000 exemption. Real and tangible personal property located outside Oregon is not taxable.

For a decedent who was not a resident of Oregon, only real property, tangible personal property, and intangible personal property located in Oregon is taxable. According to the Oregon Department of Revenue, an exemption is allowed for intangible personal property located in Oregon if a like exemption is allowed by the state in which the decedent resided.

Property subject to the Oregon inheritance tax includes real estate, cash, stocks and bonds, mortgages and notes owed to the decedent, insurance on the decedent's life, jointly owned property, certain transfers during the decedent's life, powers of appointment, and annuities.

Natural resource or fishing business property credit

In 2008 the Oregon Legislature passed a bill that provides a credit for natural resource property (land for farm use and forestland) or fishing business property passed to a family member or registered domestic partner. The law became effective May 23, 2008 and applies retroactively to deaths on or after January 1, 2007.