Oregon Revised Statutes Chapter 118 § 118.140 — Credit

Credit based upon value of natural resource property; rules. (1) As used in this section: (a) “Adjusted gross estate” means the value of the gross estate reduced by the sum of the amounts allowable under sections 2053 and 2054 of the Internal Revenue Code. (b) “Family member” means a member of the family, as defined in section 2032A of the Internal Revenue Code, of the decedent. (c) “Farm business” means a business operated for the primary purpose of obtaining a profit in money by: (A) Raising, harvesting or selling fruit or crops; (B) Feeding, breeding, managing or selling livestock, poultry, fur-bearing animals or bees, or the produce thereof; (C) Dairying and selling dairy products; (D) Breeding, stabling or training equines; (E) Propagating, cultivating, maintaining or harvesting aquatic species, birds or animal species to the extent allowed by the rules adopted by the State Fish and Wildlife Commission; (F) Raising nursery stock; (G) Practicing animal husbandry; or (H) Raising other agricultural or horticultural products. (d) “Farm use” has the meaning given that term in ORS 308A.056. (e) “Fishing business” has the meaning given that term in section 1301(b)(4) of the Internal Revenue Code. (f) “Forestland” has the meaning given that term in ORS 321.201. (g) “Forestry business” means a business operated for the primary purpose of obtaining a profit in money by the planting, cultivating, caring for, preparing, harvesting or cutting of timber or trees for market. (h) “Homesite” has the meaning given that term in ORS 308A.250. (i) “Natural resource property” means the following property in this state, if on the date of the decedent’s death the property is owned by the decedent and used in the operation of a farm business, forestry business or fishing business owned by the decedent: (A) Real property used as forestland or as forestland homesites, not to exceed 5,000 acres, or that is in farm use. (B) Timber or trees. (C) Crops, fruit or other horticultural products, both growing and stored. (D) Forestry business or farm business equipment. (E) Livestock, poultry, fur-bearing animals, bees, dairying animals, equines, aquatic species, birds or other animal species, including stored products or by-products. (F) Nursery stock as defined in ORS 571.005. (G) Boats, gear, equipment, vessel licenses or permits, commercial fishing licenses or permits and other real or personal property used in the operation of a fishing business. (H) Real or personal property used to process and sell the catch of a fishing business in fresh, canned or smoked form directly to consumers, including a restaurant with seating capacity of fewer than 15 seats at which catch from the fishing business is prepared and sold. (I) An operating allowance. (J) Any other tangible and intangible personal property used in the operation of a farm business, forestry business or fishing business. (j) “Operating allowance” means cash or a cash equivalent that is spent, maintained, used or available for the operation of a farm business, forestry business or fishing business and not spent or used for any other purpose. (k) “Qualified beneficiary” has the meaning given that term in ORS 130.010. (L) “Real property” means real property, as defined in ORS 307.010, that is in this state. (2)(a) An estate shall be allowed a credit for the value of natural resource property claimed. Any operating allowance claimed under this section may not exceed the lesser of $1 million or 15 percent of the total value of natural resource property claimed, not including the operating allowance. (b) The credit allowed under this section shall be computed by multiplying the tax that would be payable under this chapter absent the credit by a ratio, the numerator of which is an amount equal to the lesser of the amount of natural resource property claimed under this section or $7.5 million, and the denominator of which is an amount equal to the total adjusted gross estate. (c) An executor may: (A) Elect not to claim the credit allowed under this section; (B) Elect to claim less than the full amount of the credit allowed under this section; or (C) Elect to claim the credit only for the value of certain assets. (3) Except as provided in subsections (4), (7) and (8) of this section, a credit is allowed under this section only if: (a) The total adjusted gross estate does not exceed $15 million; (b) The total value of natural resource property in the estate is at least 50 percent of the total adjusted gross estate that is in this state; (c) The natural resource property is transferred to a family member; and (d) During an aggregate period of five out of the eight years ending on the date of the decedent’s death, the decedent or a family member operated a farm business, forestry business or fishing business and the property for which a credit is claimed under this section is part of the business. (4) Property tha