Estate Transfer and Fiduciary Income Taxes

Estate transfer or inheritance taxes?

A transfer tax is imposed when assets are transferred from an estate to heirs and beneficiaries. The purpose and filing requirements for both taxes are the same. The decedent's date of death determines which form you'll file: 

• Dates of death before January 1, 2012 file Form IT-1, Oregon Inheritance Tax Return. Fill-in the year of death.
• Dates of death on or after January 1, 2012 file Form OR-706, Oregon Estate Transfer Tax Return for the year of death.

Required to file

• If the total value of all estate assets was $1million or more when the decedent died, and the estate contained any property taxable by Oregon.
• If the decedent had an estate valued at $1 million or more and was an Oregon resident or a nonresident that had real property located in Oregon or tangible personal property located in Oregon.
• If the estate made estimated tax payments and the gross estate was later determined to be less than $1 million. This filing is a request to claim a refund.

Responsible for filing

• Personal representative
• Executor
• Administrator
• Fiduciary
• Custodian of estate assets
• Person who has actual or constructive possession of estate assets

Due date

For deaths prior to January 1, 2022 the tax return and payment are due nine months after the decedent's date of death. For deaths on or after January 1, 2022 the tax return and payment are due 12 months after the decedent's date of death.

If you need more time to file, use Oregon Form OR-706 EXT for a six-month extension. Extensions to file don't extend your time to pay. Extensions to pay are only granted under special circumstances as identified in OAR 150-118-0150.

Estate Income Tax

The estate owns the decedent's assets. If these assets generate income, it's subject to income tax. Report this tax on Form OR-41, Oregon Fiduciary Income Tax Return.

Trust Income Tax

In a trust, trustees take title to property to protect it for the beneficiaries. If the trust property generates income, it's subject to income tax. Report this tax on Form OR-41, Oregon Fiduciary Income Tax Return.

Fiduciary Income Tax

The estate is a taxable entity, separate from the decedent and the beneficiary. Income earned by an estate is subject to fiduciary income tax. For example, the estate may earn interest or dividend income, or rental income from estate assets. The fiduciary income tax return must report all: 

• Income from property held by the estate.
  
• Income received by the estate on behalf of the decedent, such as salaries or fees owed to the decedent but unpaid at the time of death.
• Installment gains from sales completed before death.

Consent to transfer stock 

You don't need our consent to transfer stock or a stock waiver certificate if the decedent's date of death is on or after January 1, 1987. If the date of death was before this date, contact us.

Tax professionals and estate attorneys

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Definitions of estate tax terms:

Frequently asked questions