ORS 118.145
Natural resource property exempted
(1)
As used in this section:(a)
“Family member” means a person within the third degree of relation, by blood, marriage, adoption, civil union or domestic partnership, to another person.(b)
“Materially participate” means to engage in the active management, as defined in section 2032A of the Internal Revenue Code, of a farm business, forestry business or fishing business owned by the decedent on the date of the decedent’s death. The Department of Revenue may adopt rules to administer this section consistent with this definition.(c)
“Natural resource property” has the meaning given that term in ORS 118.140 (Credit based upon value of natural resource property).(2)
An interest in natural resource property is exempt from the tax imposed under this chapter if:(a)
The property is held by a decedent for at least five years before the death of the decedent;(b)
During at least 75 percent of the days of each of the five calendar years immediately prior to date of the decedent’s death, the decedent or any family member of the decedent materially participates in the farm business, forestry business or fishing business;(c)
The interest is transferred, as a consequence of the decedent’s death, to one or more family members of the decedent and is subsequently owned by family members of the decedent for at least five consecutive calendar years beginning with the calendar year immediately following the date of the decedent’s death; and(d)
During at least 75 percent of the days of each of the five calendar years immediately following the date of the decedent’s death, any family member of the decedent materially participates in the farm business, forestry business or fishing business.(3)
An additional tax under ORS 118.005 (Definitions for ORS 118.005 to 118.540) to 118.540 (Department agreements with taxing officials of other states) shall be imposed if:(a)
The natural resource property for which an exemption is allowed under this section is, during the five calendar years following the date of the decedent’s death, subsequently sold or otherwise transferred to a person other than a family member of the decedent; or(b)
The material participation requirement of subsection (2)(d) of this section is not met.(4)
The additional liability imposed under subsection (3) of this section shall be the amount of additional tax that would have been imposed had the transferred property been included in the decedent’s taxable estate. Upon receiving notice of a subsequent sale or other transfer of property for which an exemption has been claimed, or upon receiving notice that the material participation requirement of subsection (2)(d) of this section has not been met, the department shall immediately proceed to collect the additional tax.(5)
An estate claiming the exemption under this section may not claim the credit allowed under ORS 118.140 (Credit based upon value of natural resource property).(6)
The exemption allowed under this section may not exceed $15 million for the estate. [2023 c.286 §2]
Source:
Section 118.145 — Natural resource property exempted, https://www.oregonlegislature.gov/bills_laws/ors/ors118.html.
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