Oregon Estate Tax and the Fractional Formula

The fractional formula is a method used to calculate the Oregon estate tax. It is based on the concept of fractional shares, which are used to determine the value of the estate subject to tax.

Under the fractional formula, the estate is divided into two parts: the taxable estate and the exempt estate. The taxable estate consists of all property subject to the Oregon estate tax, while the exempt estate consists of property that is not subject to the tax.

To calculate the value of the taxable estate, the value of the entire estate is multiplied by a fraction. The numerator of the fraction is the value of the taxable estate, while the denominator is the value of the entire estate. The result of this calculation is the value of the taxable estate subject to the Oregon estate tax.

The Oregon estate tax rate is tiered, with the tax rate increasing as the value of the estate increases. For estates with a value of more than $1 million but less than $2 million, the tax rate is 10%. For estates with a value of more than $2 million but less than $9.5 million, the tax rate is 12%. For estates with a value of more than $9.5 million, the tax rate is 16%.

There are some exclusions and deductions available for the Oregon estate tax. For example, the estate tax does not apply to transfers to a surviving spouse, and there is a deduction for charitable bequests. Additionally, there is a credit available for taxes paid to other states on property located outside of Oregon.

The fractional formula is a complex method for calculating the Oregon estate tax, and it is important for individuals and families to understand how it works in order to plan for the transfer of their estates. It is also important to consult with a financial or legal professional to ensure that the calculation of the Oregon estate tax is done correctly and to minimize the impact of the tax on the estate.