By Therese Ure and Nicole Widdis
Those inheriting natural resource property — which may include land used for farming, forestland or a commercial fishing operation — may qualify for the Natural Resources Tax Credit. Oregon Revised Statute 118.140 allows credit towards inheritance tax obligations based on the value of natural resource and commercial fishery properties, and possibly the value of business working capital and equipment related to those properties.
The legislation’s purpose is protection of natural resource and commercial fishing properties that could otherwise be liquidated to cover inheritance tax obligations. The 2007 enactment of ORS 118.140 was later amended in May, 2008. The amendments are retroactive to an estate where the decedent died on or after January 1, 2007. In addition, eligibility limitations exist. In most situations the total adjusted gross estate must not exceed $15 million and the value of the credit-eligible property must make up at least 50% of the total adjusted gross estate. To qualify for the credit, the eligible property must also be transferred to a family member or the decedent’s registered domestic partner.
The 2009 Oregon Legislative session is considering further amendments to ORS 118.140, in House Bill 3305. These amendments include an adjustment to the credit to consider inflation. The proposed amendments, if passed, will not be retroactive. House Bill 3305 can be viewed at http://www.leg.state.or.us/09reg/measures/hb3300.dir/hb3305.intro.html
Those who have inherited any natural resources property should check with their tax consultant and attorney to discuss their eligibility and options.
*More information on the Natural Resources Credit can be found at http://www.oregon.gov/DOR/BUS/inher-adv.shtml.
*The 2008 Natural Resources credit form is located at http://www.oregon.gov/DOR/BUS/forms-fiduciary.shtml#2007_Tax_Year, under the link to 2008 Tax Year forms.
