CHAPTER 3. INHERITANCE TAX EXEMPTIONS AND DEDUCTIONS
IC 6-4.1-3
Chapter 3. Inheritance Tax Exemptions and Deductions
IC 6-4.1-3-1
Exempt transfers
Sec. 1. Each transfer described in section 2055(a) of the InternalRevenue Code is exempt from the inheritance tax.
As added by Acts 1976, P.L.18, SEC.1. Amended by Acts 1976,P.L.19, SEC.1.
IC 6-4.1-3-1.5
Transfer to cemetery association
Sec. 1.5. (a) As used in this section, "cemetery" and "cemeterypurposes" have the same meaning as the definitions of those termscontained in IC 23-14-33.
(b) The transfer of property to a cemetery association is exemptfrom the inheritance tax if the property is used for cemeterypurposes.
As added by Acts 1980, P.L.57, SEC.1. Amended by P.L.52-1997,SEC.2.
IC 6-4.1-3-2
Repealed
(Repealed by Acts 1976, P.L.19, SEC.3.)
IC 6-4.1-3-3
Repealed
(Repealed by Acts 1976, P.L.19, SEC.3.)
IC 6-4.1-3-4
Repealed
(Repealed by Acts 1976, P.L.19, SEC.3.)
IC 6-4.1-3-5
Repealed
(Repealed by Acts 1980, P.L.57, SEC.29.)
IC 6-4.1-3-6
Life insurance proceeds
Sec. 6. The proceeds from life insurance on the life of a decedentare exempt from the inheritance tax imposed as a result of his deathunless the proceeds become subject to distribution as part of hisestate and subject to claims against his estate.
As added by Acts 1976, P.L.18, SEC.1.
IC 6-4.1-3-6.5
Annuity payments
Sec. 6.5. An annuity, or other payment, described in Section2039(a) of the Internal Revenue Code is exempt from the inheritancetax imposed as a result of a decedent's death to the same extent that
the annuity or other payment is excluded from the decedent's federalgross estate under Section 2039 of the Internal Revenue Code.
As added by Acts 1977(ss), P.L.6, SEC.2. Amended by Acts 1980,P.L.57, SEC.2; P.L.87-1983, SEC.2; P.L.2-1987, SEC.24.
IC 6-4.1-3-7
Transfers of property by decedent to surviving spouse; qualifyingincome interest for life; election
Sec. 7. (a) Each property interest which a decedent transfers to hissurviving spouse is exempt from the inheritance tax imposed as aresult of his death.
(b) For the purpose of subsection (a), "property interest which adecedent transfers to his surviving spouse" includes a propertyinterest from which the surviving spouse is entitled for life to incomeor payments and which otherwise qualifies for deduction from thegross estate of the decedent under Section 2056(b)(5) or 2056(b)(6)of the Internal Revenue Code.
(c) The personal representative of the decedent's estate or thetrustee or transferee of property transferred by the decedent may, forthe purpose of the exemption established by subsection (a), elect totreat property passing from the decedent in which the survivingspouse has a qualifying income interest for life as a property interestwhich a decedent transfers to his surviving spouse. For purposes ofthis section, "qualifying income interest for life" means a qualifyingincome interest for life (as defined in Section 2056(b)(7) of theInternal Revenue Code).
(d) The election referred to in subsection (c) shall be made inwriting and shall be attached to the inheritance tax return, if one isrequired to be filed. The election, once made, is irrevocable.
As added by Acts 1976, P.L.18, SEC.1. Amended by Acts 1979,P.L.75, SEC.3; Acts 1982, P.L.55, SEC.2; P.L.2-1987, SEC.25.
IC 6-4.1-3-8
Repealed
(Repealed by Acts 1979, P.L.75, SEC.15.)
IC 6-4.1-3-8.5
Repealed
(Repealed by Acts 1982, P.L.56, SEC.6.)
IC 6-4.1-3-9
Repealed
(Repealed by Acts 1982, P.L.56, SEC.7.)
IC 6-4.1-3-9.1
Repealed
(Repealed by P.L.254-1997(ss), SEC.37.)
IC 6-4.1-3-9.2
Repealed
(Repealed by Acts 1982, P.L.56, SEC.6.)
IC 6-4.1-3-9.5
Repealed
(Repealed by P.L.254-1997(ss), SEC.37.)
IC 6-4.1-3-9.7
Repealed
(Repealed by P.L.254-1997(ss), SEC.37.)
IC 6-4.1-3-10
Portion of property interests transferred to Class A transfereeunder taxable transfer
Sec. 10. The first one hundred thousand dollars ($100,000) ofproperty interests transferred to a Class A transferee under a taxabletransfer or transfers is exempt from the inheritance tax.
As added by Acts 1976, P.L.18, SEC.1. Amended by Acts 1979,P.L.75, SEC.6; Acts 1980, P.L.57, SEC.5; Acts 1981, P.L.90, SEC.2;P.L.87-1983, SEC.3; P.L.254-1997(ss), SEC.9.
IC 6-4.1-3-11
Portion of property interest transferred to Class B transfereeunder taxable transfer
Sec. 11. The first five hundred dollars ($500) of property intereststransferred to a Class B transferee under a taxable transfer ortransfers is exempt from the inheritance tax.
As added by Acts 1976, P.L.18, SEC.1.
IC 6-4.1-3-12
Portion of property interest transferred to Class C transfereeunder taxable transfer
Sec. 12. The first one hundred dollars ($100) of property intereststransferred to a Class C transferee under a taxable transfer ortransfers is exempt from the inheritance tax.
As added by Acts 1976, P.L.18, SEC.1.
IC 6-4.1-3-12.5
Repealed
(Repealed by P.L.252-2001, SEC.38.)
IC 6-4.1-3-13
Items deductible from value of property interests transferred byresident decedent by will, intestate succession, or under trust
Sec. 13. (a) For purposes of this section, the term "propertysubject to the inheritance tax" means property transferred by adecedent under a taxable transfer.
(b) The following items, and no others, may be deducted from thevalue of property interests transferred by a resident decedent under
his will, under the laws of intestate succession, or under a trust:
(1) the decedent's debts which are lawful claims against hisresident estate;
(2) taxes on the decedent's real property which is located in thisstate and subject to the inheritance tax, if the real property taxeswere a lien at the time of the decedent's death;
(3) taxes on decedent's personal property which is located inthis state and subject to the inheritance tax, if the personalproperty taxes are a personal obligation of the decedent or a lienagainst the property and if the taxes were unpaid at the time ofthe decedent's death;
(4) taxes imposed on the decedent's income to date of death, ifthe taxes were unpaid at the time of his death;
(5) inheritance, estate, or transfer taxes, other than federal estatetaxes, imposed by other jurisdictions with respect to intangiblepersonal property which is subject to the inheritance tax;
(6) mortgages or special assessments which, at the time ofdecedent's death, were a lien on any of decedent's real propertywhich is located in this state and subject to the inheritance tax;
(7) decedent's funeral expenses;
(8) amounts, not to exceed one thousand dollars ($1,000), paidfor a memorial for the decedent;
(9) expenses incurred in administering property subject to theinheritance tax, including but not limited to reasonable attorneyfees, personal representative fees, and trustee fees;
(10) the amount of any allowance provided to the residentdecedent's children by IC 29-1-4-1; and
(11) The value of any property actually received by a residentdecedent's surviving spouse in satisfaction of the allowanceprovided by IC 29-1-4-1, regardless of whether or not a claimfor that allowance has been filed under IC 29-1-14.
(c) The amounts which are deductible under subsection (b)(6) ofthis section are deductible only from the value of the real propertyencumbered by the mortgage or special assessment.
As added by Acts 1976, P.L.18, SEC.1. Amended by Acts 1976,P.L.20, SEC.1; Acts 1979, P.L.75, SEC.7; Acts 1980, P.L.57, SEC.6;Acts 1981, P.L.89, SEC.2.
IC 6-4.1-3-14
Items deductible from value of property interests transferred byresident decedent other than by will, intestate succession, or undertrust
Sec. 14. (a) Except as provided in subsection (b), the followingitems, and no others, may be deducted from the value of propertyinterests which are transferred by a resident decedent but which arenot transferred by the decedent's will, under the laws of intestatesuccession, or under a trust:
(1) Those taxes described in section 13(b)(5) of this chapter.
(2) Liens against the property interests that are transferred.
(3) The decedent's debts, funeral expenses, and estate
administration expenses, including reasonable attorney's feesincurred in filing the inheritance tax return.
(b) In addition, any portion of the deduction provided by section13(b)(10) of this chapter which is not needed to reduce to zero (0)the value of the property referred to in section 13 of this chapter maybe deducted from the value of any other propety transferred by theresident decedent to the decedent's children who are entitled to theallowance provided by IC 29-1-4-1. If more than one (1) of thedecedent's children are entitled to the allowance, the deductionprovided by this subsection shall be divided equally among all thedecedent's children who are entitled to the allowance.
As added by Acts 1976, P.L.18, SEC.1. Amended by Acts 1976,P.L.20, SEC.2; Acts 1979, P.L.75, SEC.8; Acts 1980, P.L.57, SEC.7;P.L.94-1989, SEC.1.
IC 6-4.1-3-15
Items deductible from value of property interests transferred bynon-resident decedent
Sec. 15. The following items, and no others, may be deductedfrom the value of property interests transferred by a non-residentdecedent:
(1) taxes, other than federal estate taxes;
(2) those administration expenses described in section 13(b)(9)of this chapter;
(3) liens against the property so transferred; and
(4) claims against the decedent's domiciliary estate which areallowed by the court having jurisdiction over that estate andwhich will not be paid from that estate because it is exhausted.
As added by Acts 1976, P.L.18, SEC.1.