OAC 710:35
OKLAHOMA TAX COMMISSION
CHAPTER 35. ESTATES
Subchapter
Section
1. General Provisions..............................................................................................................710:35-1-1
3. Returns; Remittance; Releases ..........................................................................................710:35-3-1
5. Determination of Oklahoma Taxable Estate .....................................................................710:35-5-1
[Authority: 68 O.S. §§116, 203, 806]
[Source: Codified 12-30-91]
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CHAPTER 35. ESTATES
SUBCHAPTER 1. GENERAL PROVISIONS.........................................................................................1
710:35-1-1.
Purpose.............................................................................................................................1
710:35-1-2.
Definitions ........................................................................................................................1
710:35-1-3.
Annual report available to public ...................................................................................1
SUBCHAPTER 3. RETURNS; REMITTANCE; RELEASES...............................................................1
PART 1. FILING AND PAYMENT ..........................................................................................................1
710:35-3-1.
Duty to file estate tax return............................................................................................1
710:35-3-2.
Time for filing relating to weekends and holidays..........................................................1
710:35-3-3.
Extension to file estate tax return....................................................................................2
710:35-3-4.
Liability for payment of estate tax ..................................................................................2
710:35-3-5.
Payment plans..................................................................................................................2
710:35-3-6.
Computation and due date of interest.............................................................................2
710:35-3-7.
Application for reduction of interest...............................................................................2
710:35-3-8.
Taxes paid under protest .................................................................................................3
710:35-3-9.
Estate tax lien ..................................................................................................................3
PART 3. RELEASES.................................................................................................................................4
710:35-3-20.
Estate tax releases ............................................................................................................4
710:35-3-21.
Release upon full payment; order releasing taxable estates...........................................4
710:35-3-22.
Order exempting non-taxable estates .............................................................................4
710:35-3-23.
Order releasing property subject to Oklahoma Estate Tax liability and lien;
partial release of specific property subject to the determination of tax .......................................5
710:35-3-24.
Estate passing to a surviving spouse ...............................................................................5
SUBCHAPTER 5. DETERMINATION OF OKLAHOMA TAXABLE ESTATE............................5
PART 1. PROPERTY TO BE DISCLOSED ON RETURN ...................................................................5
710:35-5-1.
Identification fully of all property...................................................................................5
710:35-5-2.
Transfers in contemplation of death ...............................................................................6
710:35-5-3.
Joint interests ...................................................................................................................6
710:35-5-4.
Cash surrender value of life insurance ...........................................................................7
710:35-5-5.
Unreported assets discovered ..........................................................................................7
PART 3. VALUATION .............................................................................................................................7
710:35-5-20.
Valuation of all properties...............................................................................................7
710:35-5-21.
Mineral values..................................................................................................................7
710:35-5-22.
Valuation of stocks and bonds.........................................................................................8
710:35-5-23.
Valuation of household goods and other tangible personal property............................8
710:35-5-24.
Valuation of partnership or proprietorship....................................................................8
PART 5. ALTERNATE VALUATION ....................................................................................................8
710:35-5-30.
Alternate valuation election; properties includable in the estate; explanation
of "lapse of time" ............................................................................................................................8
710:35-5-31.
Minerals - alternate valuation .........................................................................................9
710:35-5-32.
Debts and expenses - alternate valuation........................................................................9
PART 7. DEBTS AND EXPENSES..........................................................................................................9
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710:35-5-40.
Verification of debts and expenses ..................................................................................9
710:35-5-41.
Selling expenses................................................................................................................9
710:35-5-42.
Interest expense................................................................................................................9
710:35-5-43.
Claims based on contracts ...............................................................................................9
710:35-5-44.
Federal gift taxes............................................................................................................10
710:35-5-45.
Losses from casualties and theft....................................................................................10
710:35-5-46.
Income taxes...................................................................................................................10
710:35-5-47.
Property taxes ................................................................................................................11
710:35-5-48.
Unpaid mortgages..........................................................................................................11
710:35-5-49.
Attorney fees ..................................................................................................................11
710:35-5-50.
Executor's fees................................................................................................................11
710:35-5-51.
Interest on federal estate tax not deductible .................................................................11
710:35-5-52.
Miscellaneous and administration expenses .................................................................11
PART 9. DEDUCTIONS; EXCLUSIONS; EXEMPTIONS .................................................................11
710:35-5-60.
Public, charitable and religious deductions ..................................................................11
710:35-5-61.
Qualified terminal interest property; life estates..........................................................12
710:35-5-62.
Wrongful death claim ....................................................................................................12
710:35-5-63.
Not lineal exemptions.....................................................................................................12
710:35-5-64.
Lineal heir exemption for assets of qualifying family farm or business
[Revoked] ......................................................................................................................................12
PART 11. FEDERAL ESTATE TAX CREDIT AND............................................................................12
ADDITIONAL ASSESSMENT OF OKLAHOMA ESTATE TAX ......................................................12
710:35-5-70.
Separate credit provision...............................................................................................12
710:35-5-71.
Federal credit for state death taxes ...............................................................................12
710:35-5-72.
Interest on federal credit ...............................................................................................12
710:35-5-73.
Adjustments affecting federal credit.............................................................................13
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CHAPTER 35. ESTATES
SUBCHAPTER 1. GENERAL PROVISIONS
710:35-1-1. Purpose
The provisions of this Chapter have been promulgated for the purpose of compliance with the
Oklahoma Administrative Procedures Act, 75 O.S. §§250.1 et seq, and to facilitate the
administration, enforcement, and collection of taxes and other levies enacted by the Oklahoma
Legislature with respect to decedents' estates.
710:35-1-2. Definitions
The following words and terms, when used in this Chapter, shall have the following meaning,
unless the context clearly indicates otherwise:
"Qualified disclaimer" means an irrevocable and unqualified refusal by a person to accept an
interest in property. The disclaimer must be timely made as provided by statute. [See: 84 O.S.
§§22 et seq.; 60 O.S. §§751 et seq.]
710:35-1-3. Annual report available to public
(a) After July 1, 1988, an annual listing of years for which an index is available will be displayed for
public inspection at the offices of the Estate Tax Section of the Oklahoma Tax Commission during
normal working hours.
(b) The Annual Report will contain the following information:
(1) Name of Decedent
(2) Date of Death
(3) Address of Decedent
(4) Probate County
(5) Probate Number
(c) Any reproduction costs will be based on the current rates prescribed by the Commission. [See:
68 O.S. §116]
[Source: Amended at 28 Ok Reg 934, eff 6-1-11]
SUBCHAPTER 3. RETURNS; REMITTANCE; RELEASES
PART 1. FILING AND PAYMENT
710:35-3-1. Duty to file estate tax return
The executor or administrator of a decedent's estate must file the Estate Tax Return. If there is no
duly qualified executor or administrator appointed, qualified and acting within this State, the person
actively or constructively in possession of the decedent's property shall file a return.
710:35-3-2. Time for filing relating to weekends and holidays
When the last day prescribed for the performance of any act required by the Oklahoma Estate
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Tax Law falls on a Saturday, Sunday or legal holiday, the act shall be considered performed timely if
done on the next day which is not a Saturday, Sunday or legal holiday.
710:35-3-3. Extension to file estate tax return
The time for filing the Estate Tax Return may be extended, up to a maximum of six (6) months,
upon request by the representative of the estate for an extension of time to file. Written application
is to be addressed to the Estate Tax Section.
[Source: Amended at 14 Ok Reg 2695, eff 6-26-97]
710:35-3-4. Liability for payment of estate tax
(a) Individuals Liable. The Oklahoma Estate Tax imposed by statute with respect to the estates of
residents and nonresidents, is payable by the executor or administrator of the decedent's estate. This
duty applies to the entire tax, regardless of the fact that the gross estate consists in part of property
which does not come within the possession of the executor or administrator. If there is no executor
or administrator appointed, qualified and acting in this state, any person in actual or constructive
possession of any property of the decedent is required to pay the entire tax to the extent of the value
of the property in his possession. This is applicable to any interest due and owing. [See: 68 O.S.
§§802, 804, 806]
(b) Accountability for Debts Paid Prior to Payment of Tax. Every executor, administrator or
assignee, or other person, who pays, in whole or in part, any debt due by the person or estate for
whom or for which he acts before he satisfies and pays the tax due to Oklahoma from such person or
estate, shall become accountable to the extent of such payments for the tax so due to Oklahoma, or
for so much thereof as may remain due and unpaid.
710:35-3-5. Payment plans
Requests for estate tax payment plans should be made in writing to the Estate Tax Section
Administrator. [See: 68 O.S. §806(b)]
710:35-3-6. Computation and due date of interest
Interest on Oklahoma Estate Taxes is due and payable nine (9) months from the date of the death
of the decedent, except as otherwise provided in 710:35-5-72. Interest is computed at the following
rates and increments:
FOR TIME PERIOD
July 1, 1988 to present
March 23, 1983 to June 30, 1988
Prior to March 23, 1983
RATE
1¼ percent per month
1½ percent per month
1 percent per month
710:35-3-7. Application for reduction of interest
(a) Notice. Notice of application to a District Court for the reduction of interest on Oklahoma
Estate Taxes shall be served on the Division Administrator of the Estate Tax Section, who shall
determine the correctness of the action. [See: 68 O.S. §806(b)]
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(b) Qualifications for reduction. The application must set out the reason(s) as specified by statute
that qualify for the reduction of interest and the portion of the estate so affected. [See: 68 O.S.
§806(b)]
(c) Procedure. Upon issuance of a court order stating that a situation reasonably exists that would
warrant the reduction, a certified copy shall be delivered to the Division Administrator of the Estate
Tax Section.
(d) Interested party defined. The terms "pending litigation","contingent claims", or
"disagreements between interested parties" as used in 68 O.S. §806(b) shall relate only to
inclusion or exclusion of those specific properties to which the litigation, claim or disagreement
pertains. The reduction of interest does not apply to the remaining property reported in the estate.
Neither the Oklahoma Tax Commission, nor the Internal Revenue Service, are considered to be
interested parties. [See: 68 O.S. §806(b)]
710:35-3-8. Taxes paid under protest
In any case where a taxpayer files a written protest of a proposed estate tax assessment with the
Commission, the taxpayer may pay the taxes or additional taxes, as the case may be, and designate
that the payment is being made under protest. Such payment will stop the accrual of interest, if any,
upon the taxes so paid. If the Commission sustains the protest in whole or in part, the amount
determined by the Commission not to be due shall be refunded to the taxpayer, without interest.
[See: 68 O.S. §221]
710:35-3-9. Estate tax lien
(a) General rule. For decedents who die on or before December 31, 2009, Oklahoma estate
taxes shall be and remain a lien upon all property which is part of the gross estate of the
decedent, as defined in 68 O.S. § 807, immediately upon the death of the decedent.
(b) Exceptions. The Oklahoma estate tax lien does not attach to the following categories of
property:
(1) Property used for the payment of charges against the estate and expenses of
administration, allowed by the court having jurisdiction thereof;
(2) Property reported to the Oklahoma Tax Commission by the responsible party or parties
which shall have passed to a bonafide purchaser of value in which case the tax lien shall
attach to the consideration received from such purchaser by the heirs, legatees, devisees,
distributes, donees or transferees; and
(3) Property passing to the surviving spouse, either through the estate of the decedent, by
joint tenancy, or otherwise.
(c) Duration. The Oklahoma estate tax lien shall continue as a lien on all property of the
decedent's gross estate, except for the categories of property described in subsection (b), for ten
(10) years from the death of the decedent, unless an order releasing taxable estate or order
exempting the estate from estate tax is obtained from the Tax Commission. The Oklahoma
estate tax lien is extinguished upon the expiration of ten (10) years from the date of the death of
the decedent unless prior thereto the Tax Commission causes a tax warrant to be filed and appear
of record in which case the Oklahoma estate tax lien then shall continue as a lien on all property
of the decedent's gross estate, except for the categories of property described in subsection (b),
until a release of the tax warrant is obtained and filed of record
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[Source: Added at 19 Ok Reg 2037, eff 7-1-08]
PART 3. RELEASES
710:35-3-20. Estate tax releases
(a) For purposes of this Part and administration of the Oklahoma Estate Tax Code, the word
"release" shall mean and include the words "acquittance," "waiver," "disclaimer," "order
exempting" or other similar language used in the Estate Tax Code.
(b) The Division Administrator of the Estate Tax Section of the Oklahoma Tax Commission is
authorized to issue releases of Oklahoma Estate Tax liability and liens thereby as to all property
listed in the Oklahoma Estate Tax Return or other information filed with the Oklahoma Tax
Commission in accordance with 710:35-3-21 and 710:35-3-24. Such releases shall be upon forms
approved by the Commission, issued under facsimile signature of the Commissioners and the official
seal of the Oklahoma Tax Commission, and shall constitute orders of the Commission.
(c) The Division Administrator of the Estate Tax Section of the Tax Commission or his designee
shall have authority to attest the signatures and affix the official seal of the Oklahoma Tax
Commission to releases and liens associated with Estate Taxes. [See: 68 O.S. §806(c)]
710:35-3-21. Release upon full payment; order releasing taxable estates
(a) Upon payment of all Estate Tax and interest, an Order Releasing Taxable Estates will be issued
as to both real and personal property of the estate either:
(1) Listed upon the Oklahoma Estate Tax Return which reports Oklahoma Estate Tax to be due
and payable; or
(2) Listed in an audit performed by the Estate Tax Section. The Order Releasing Taxable Estate
shall include a recitation of the name of the decedent, the amount of tax paid, the account number,
receipt number and date of payment and that the reported estate of said decedent, consisting of
real property or personal property or both, is released from Oklahoma Estate Tax liability and lien
therefor. Recitation of legal description of real property or of the personal property of the estate
shall not be set out in the Order Releasing Taxable Estates.
(b) For deaths occurring on or after January 1, 2010, no release of estate tax liability is required.
710:35-3-22. Order exempting non-taxable estates
(a) Upon audit by the Estate Tax Section of any Oklahoma Estate Tax Return and determination
made that no Oklahoma Estate Tax is due, an Order Exempting Non-Taxable Estate will be issued as
to both real and personal property of the Estate.
(b) The Order Exempting Non-Taxable Estates shall include a recitation of the name of the decedent
and that the net value of the estate of said decedent reported to the Commission is less than the
applicable statutory exemptions and credits, and that the reported estate of the said decedent,
consisting of real property or personal property or both, is released from Oklahoma Estate Tax
liability and any associated lien. Recitation of the legal description of real property or of personal
property of the Estate will not be set out in the Order Exempting Non-Taxable Estates. [See: 68
O.S. §821]
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710:35-3-23.
Order releasing property subject to Oklahoma Estate Tax liability and lien;
partial release of specific property subject to the determination of tax
(a) In matters where the Oklahoma Estate Tax Return has been filed with the Commission, or
arrangements for filing the return have been made with the Estate Tax Section, the Division
Administrator may issue an Order Releasing Property Subject to Estate Tax Liability and Lien, upon
therefor and a showing that payment of any Estate Tax liability has been otherwise provided for.
(b) The Order Releasing Specific Property Subject to Estate Tax Liability and Lien shall recite the
legal description of the real property or the full description of the personal property for which the
partial release is requested.
(c) For deaths occurring on or after January 1, 2010, no release of estate tax liability is required.
710:35-3-24. Estate passing to a surviving spouse
(a) Order Exempting Estate Passing to a Surviving Spouse.
(1) Upon audit by the Estate Tax Section and a determination that no Oklahoma Estate Tax is
due, an Order Exempting Estate Passing to a Surviving Spouse will be issued as to both real and
personal property of the Estate.
(2) An Oklahoma Estate Tax affidavit must be submitted by the surviving spouse, along with a
certified Death Certificate. [See: 68 O.S. §815]
(b) Contents. The Order Exempting Estate Passing to a Surviving Spouse shall include a recitation
of the name of the decedent and that all of decedent's property included in estate passing to the
Surviving Spouse is released from any Estate Tax Lien.
(c) Requirements. No Order described in this Section will be issued without submission of either:
(1) An Oklahoma Estate Tax Return; or
(2) An Oklahoma Estate Tax Affidavit and accompanying certified Death Certificate.
(d) Effect. No Order described in this Section will be issued where the estate does not pass wholly
and solely to the surviving spouse; nor where there is any Oklahoma Estate Tax liability determined
to be due; nor where there is tax determined to be due under 68 O.S. §804.
SUBCHAPTER 5. DETERMINATION OF OKLAHOMA TAXABLE ESTATE
PART 1. PROPERTY TO BE DISCLOSED ON RETURN
710:35-5-1. Identification fully of all property
All property included in the Estate Tax Return shall be fully identified. This shall include, but
not be limited to:
(1) Real estate: Complete legal description and address.
(2) Minerals: Complete legal description, interest owned.
(3) Stocks: Issue name, identifying number and number of shares, documentation to support
non-traded stock values.
(4) Bonds: Issue name, identifying number, par value, value at valuation date, and issue date.
(5) Personal property:
(A) Accounts at financial institutions - account number, name of institution, type of
account, accrued interest to date of death, account balance at date of death.
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(B) Accounts receivable, Contracts of Sale, Partnerships within or without the State of
Oklahoma, Notes, Mortgages, Liens: List name of payee, due date of amount owing,
accrued interest to date of death, copy of instrument and amortization schedule, Federal
Form K-1 for year of death. The interest of a nonresident decedent in a partnership will be
taxed by the state where the partnership does business.
(C) Other personal property - description and fair market value.
(D) Proceeds received as a result of a "wrongful death" claim are not includable as an asset
of the estate; but where it can be established that the wrongful death proceeds represent
damages to which the decedent became entitled during his lifetime (such as for pain and
suffering and medical expenses) rather than damages for his premature death, the value of
these amounts will be includable.
(6) Life insurance: Company, policy number, beneficiaries and addresses, face value and
amount payable. This includes cash surrender value for policies owned by the decedent on the
lives of others.
(7) Prior transfers: Property description, date of actual transfer, any consideration and Federal
Gift Tax Return Form 709 or schedule G of Federal Estate Tax Return concerning information on
the transfer(s).
(8) Property outside Oklahoma - total gross value.
710:35-5-2. Transfers in contemplation of death
Any transfer of property referred to in 68 O.S. 807(A)(2) is to be disclosed in the Oklahoma
Estate Tax Return (Form 454-R82). In addition, copies of Federal Gift Tax, Form 709, shall be
included with the Oklahoma Estate Tax Return. This requirement is made notwithstanding a
determination by an executor or administrator that the transfer was not made in contemplation of
death or was not a material part of the estate.
710:35-5-3. Joint interests
(a) Joint interests. In general, a decedent's gross estate includes the value of property held jointly
at the time of the decedent's death, by the decedent and another person or persons with right of
survivorship, as follows:
(1) To the extent that the property was acquired by the decedent and the other joint owner or
owners by gift, devise, bequest or inheritance, the decedent's fractional share of the property is
included.
(2) In all other cases, the entire value of the property is included except such part of the entire
value as is attributable to the amount of consideration in money or money's worth furnished by
the joint owner or owners.
(b) Definition. "Property held jointly" specifically covers but is not limited to:
(1) Property held jointly by the decedent and any other person or persons, whether listed
individually or as a member of a partnership or other legally constituted entity;
(2) Property held by the decedent and spouse as tenants by the entirety; and
(3) Deposit of money, or a bond or other instrument, in the name of the decedent and any other
person and payable to either or the survivor.
(c) Applicability. This Section applies to all classes of property, whether real or personal, and
regardless of when the joint interests were granted. Furthermore, it makes no difference that the
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survivor takes the entire interest in the property by right of survivorship and that no interest therein
forms a part of the decedent's estate for purposes of administration. The joint tenancy provision has
no application to property held by the decedent and any other person or persons as tenants in
common.
(d) Claims. Where a joint owner claims an interest in property included in decedent's estate, and
the interest was acquired from the decedent, the claimant must submit facts to show that the transfer
was supported by adequate consideration.
(e) Proof. Whether consideration is adequate may be determined, in part, by a comparison of the
consideration furnished to the total cost of acquisition plus capital additions for the property. The
ratio the consideration furnished bears to the total value of the property must be proportional to the
quantum of property transferred.
(f) Determination. The executor, administrator, or claimant may submit facts to show that property
included in decedent's estate was not acquired entirely with consideration furnished by the decedent;
or was acquired by the decedent and the other joint owner or owners by gift, bequest, devise or
inheritance. [See: 68 O.S. §807(A)(4)]
710:35-5-4. Cash surrender value of life insurance
There shall be included in the Estate Tax Return the cash surrender value of any life insurance
policy owned by the decedent on the life of any other person or persons.
710:35-5-5. Unreported assets discovered
Assets that are not reported or disclosed in an Estate Tax Return shall be subject to the tax if
discovered by the Commission within ten (10) years of the date of death.
PART 3. VALUATION
710:35-5-20. Valuation of all properties
(a) Fair market value. Valuation of all property included in the Estate Tax Return shall be at fair
market value and, in the case of real property, shall not be valued at the rate it is assessed for local
taxes, nor shall it be valued at the "special use valuation" applicable for some Federal Estate Tax
purposes.
(b) Appraisals. If an appraisal has been obtained, submit with filing. The Oklahoma Tax
Commission is not restricted to the appraised value submitted in determining the value of the taxable
estate.
710:35-5-21. Mineral values
In the absence of an evaluation of mineral value by a geologist or petroleum engineer, the
minimum value to be reported on the Estate Tax Return is:
(1) Producing minerals. Except as noted, oil income should be valued at 48 times the average
monthly income for the six months preceding to six months after the date of death. Gas should
be valued at 84 times the average income for the period six months before to six months after
the date of death. The Oklahoma Tax Commission shall not be bound by the submitted
evaluation.
(2) Non-producing leased. For non-producing leased properties, the value should be one and
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one half (1 1/2) times the lease bonus if the last lease was made within one year of the date of
death.
(3) Non-producing non-leased. The value for non-producing non-leased interests should be
computed by reference to monthly lease values.
710:35-5-22. Valuation of stocks and bonds
Stocks and bonds are to be valued on the Estate Tax Return as follows:
(1) If publicly traded the value shall be the average of the high and low quotation on the
valuation date.
(2) Non-publicly traded items shall be valued in accordance with IRS Revenue Ruling 59-60.
(3) Oklahoma Turnpike Bonds are exempt from Oklahoma Estate Tax. [First National Bank
and Trust Company of Tulsa v. Oklahoma Tax Commission, 447 P.2d 441 (1968)]
710:35-5-23. Valuation of household goods and other tangible personal property
Valuation of household goods and other tangible personal property is to be either by professional
appraisal with an inventory included with the Estate Tax Return or by estimation of the appraised
value of the property in which the household goods are located subject to approval by the Estate Tax
Section. Whether an appraisal or estimation is used, an inventory of items is to be submitted with
the return.
710:35-5-24. Valuation of partnership or proprietorship
The fair market value of any interest of a decedent in a business, whether a partnership or
proprietorship, is the net amount which a willing purchaser, whether an individual or a corporation,
would pay for the interest to a willing seller, neither being under any compulsion to buy or to sell
and both having a reasonable knowledge of relevant facts. The net value is determined on the basis
of all relevant factors including but not limited to:
(1) The fair market value as of the applicable valuation date of all assets of the business,
tangible and intangible, including goodwill;
(2) The demonstrated earning capacity of the business; and
(3) IRS Revenue Ruling 59-60.
PART 5. ALTERNATE VALUATION
710:35-5-30.
Alternate valuation election; properties includable in the estate; explanation
of "lapse of time"
(a) Alternate valuation of estate property; election by executor/administrator; when election
must be made. At the election of the executor or administrator, all values will be determined by
using the alternate valuation date, and for property sold within six (6) months of the date of death,
the actual sale price. The election is made with the timely filing of the Estate Tax Return or an
extension period granted by the Commission. The election is revocable within the filing period or
the extended filing period. [See: 68 O.S. §816]
(b) Properties includable. If a binding contract for the sale, exchange or other disposition of estate
property is entered into, the property is considered as sold, exchanged, or otherwise disposed of on
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the effective date of the contract, unless the contract is not subsequently carried out substantially in
accordance with its terms. The phrase "distributed, sold, exchanged or otherwise disposed of"
comprehends all possible ways by which property ceases to form a part of the gross estate. The term
does not, however, extend to transactions which are mere changes in form. Nor does it include an
exchange of stock or securities in a corporation for stock or securities in the same corporation or
another corporation in a transaction, such as a merger, recapitalization, or reorganization. [See: 68
O.S. §816(B)(1)]
(c) Explanation of lapse of time. Properties, interests, or estates which are "affected by mere
lapse of time" include patents, estates for the life of a person other than the decedent, remainders,
reversions, and other like properties, interests, or estates. The phrase "affected by mere lapse of
time" has no reference to obligations for the payment of money, whether or not interest-bearing, the
value of which change with the passing of time. [See: 68 O.S. §816(B)(1)(C)]
710:35-5-31. Minerals - alternate valuation
Upon election of alternate valuation date, producing minerals owned by the estate will be valued
at the alternate valuation date and inclusion of production income between date of death and
alternate valuation date will be made in addition to alternate valuation date value. [See: 68 O.S.
§816]
710:35-5-32. Debts and expenses - alternate valuation
Debts and expenses incurred in relation to income earned between date of death and alternate
valuation date are not allowable as estate deductions.
PART 7. DEBTS AND EXPENSES
710:35-5-40. Verification of debts and expenses
All debts or administrative expenses of an estate are subject to verification by the Estate Tax
Section.
710:35-5-41. Selling expenses
Expenses for selling property including documentary stamps purchased for deed recordation,
auction fees and abstract costs of the estate are deductible, to the extent of the decedent's interest in
the property with approval of the Court.
710:35-5-42. Interest expense
The amounts that may be deducted as claims against the decedent's estate are such only as
represent personal obligations of the decedent existing at the time of death, whether or not then
matured, and interest thereon which has accrued at the time of death. Only interest that had accrued
at the date of death is deductible even though the executor or administrator may elect the alternate
valuation date.
710:35-5-43. Claims based on contracts
The allowance of a deduction on the Estate Tax Return for a claim founded upon a promise or
agreement is limited to the extent that the liability was contracted bona fide and for adequate and full
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consideration in money or money's worth.
710:35-5-44. Federal gift taxes
Unpaid federal gift taxes on gifts made by the decedent before his death are deductible; however,
if a gift is considered as made one-half by decedent and one-half by spouse under 26 U.S.C.A.
§2513, the gift tax deductible is the amount attributable to a gift in fact made by the decedent only.
No portion of gift tax considered attributable to spouse's one-half of a gift is deductible.
710:35-5-45. Losses from casualties and theft
A deduction is allowed for losses incurred during the settlement of the estate arising from fires,
storms, shipwrecks, or other casualties, or from theft, if the losses are not compensated for by
insurance or otherwise. If the loss is partly compensated for, the excess of the loss over the
compensation may be deducted. Losses which are not the nature described are not deductible. In
order to be deductible a loss must occur during the settlement of the estate. If a loss with respect to
an asset occurs after its distribution to the distributee it may not be
deducted. Notwithstanding the foregoing, no deduction is allowed under this section if the estate has
elected to take this deduction pursuant to the alternative provisions for income tax purposes.
710:35-5-46. Income taxes
(a) General Rule. Unpaid income taxes are deductible on the Estate Tax Return if they are on
income properly includable in an income tax return of the decedent for a period before his death.
Taxes on income received after the decedent's death are not deductible.
(b) Income included on joint return. If income received by a decedent during his lifetime is
included in a joint income tax return filed by the decedent and his spouse, or by the decedent's estate
and his surviving spouse, the portion of the joint liability for the period covered by the return for
which a deduction will be allowed is the amount for which the decedent's estate would be liable
under Oklahoma law, as between the decedent and his spouse, after enforcement of any effective
right of reimbursement or contribution.
(c) Presumption. In the absence of evidence to the contrary, the deductible amount is presumed to
be an amount bearing the same ratio to the total joint tax liability for the period covered by the return
that the amount of income tax for which the decedent would have been liable if he had filed a
separate return for that period bears to the total of the amounts for which the decedent and his spouse
would have been liable if they had both filed separate returns for that period. Thus, in the absence of
evidence to the contrary, the deductible amount is a sum equal to the decedent's separate tax, divided
by both spouses' separate taxes, times the joint tax liability.
(d) Limitation. However, the deduction cannot in any event exceed the lesser of:
(1) The decedent's liability for the period (as determined in this paragraph) reduced by the
amounts already contributed by the decedent toward payment of the joint liability, or
(2) If there is an enforceable agreement between the decedent and his spouse or between the
executor and the spouse pertaining to the payment of the joint liability, the amount which
pursuant to the agreement is to be contributed by the estate toward payment of the joint liability.
(e) Refunds. If the decedent's estate and his surviving spouse are entitled to a refund on account of
an overpayment of a joint income tax liability, the overpayment is an asset includable in the
decedent's gross estate in the amount to which the estate would be entitled under Oklahoma law, as
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between the estate and the surviving spouse. In the absence of evidence to the contrary, the
includable amount is presumed to be the amount by which the decedent's contributions toward
payment of the joint tax exceeds his liability determined in accordance with the principles set forth
in this Section. [See: 68 O.S. §808(b)]
710:35-5-47. Property taxes
Property taxes are not deductible on the Estate Tax Return unless they accrued before the
decedent's death. However, they are not deductible merely because they have accrued in an
accounting sense. Property taxes in order to be deductible must be an enforceable obligation of the
decedent at the time of his death on property within the State of Oklahoma. [See: 68 O.S. §808(a)]
710:35-5-48. Unpaid mortgages
A deduction is allowed from a decedent's gross estate of the full unpaid amount of a mortgage
upon, or of any other indebtedness in respect of any property of the gross estate, including interest
which had accrued thereon to the date of death. Only interest accrued to the date of the decedent's
death is allowable even under the alternate valuation method. [See: 68 O.S. §§808, 816]
[Source: Amended at 18 Ok Reg 2809, eff 6-25-01]
710:35-5-49. Attorney fees
Reasonable attorney fees allowed by the court and paid for by the legal representative as a cost of
administering the estate shall be allowed as a deduction on the Estate Tax Return. [See: 68 O.S.
§808]
710:35-5-50. Executor's fees
Executor fees shall be allowed as a deduction on the Estate Tax Return as provided for by statute.
[See: 58 O.S. §527]
710:35-5-51. Interest on federal estate tax not deductible
Interest on Federal Estate Taxes is not deductible on the Oklahoma Estate Tax Return.
710:35-5-52. Miscellaneous and administration expenses
Miscellaneous administration expenses include such expenses as court costs, accountants' fees,
appraisers' fees. Expenses necessarily incurred in preserving and distributing the estate are
deductible on the Estate Tax Return. Expenses for preserving and caring for the property may not
include outlays for additions or improvements; nor will such expenses be allowed for a longer period
than the executor is reasonably required to retain the property.
PART 9. DEDUCTIONS; EXCLUSIONS; EXEMPTIONS
710:35-5-60. Public, charitable and religious deductions
The deduction for transfers for public, charitable and religious uses is allowed from the gross
estate of a decedent who was a citizen or resident of the United States at the time of death for
the value of property included in the decedent's estate and transferred by the decedent during his
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lifetime or by will. This deduction shall only apply to transfers to organizations that have received a
tax exempt classification from the Internal Revenue Service. The value of the charitable deduction
shall be reduced by a proration of expenses, debts, taxes or other obligations if such reduction is
determined as a result of an Oklahoma Estate Tax audit and review. Qualifying organizations will
be determined by reference to 26 U.S.C.A. §501(C)(3), which grants tax exempt status. [See: 68
O.S. §808]
[Source: Amended at 9 Ok Reg 3019, eff 7-13-92]
710:35-5-61. Qualified terminal interest property; life estates
The qualified terminal interest property election provided for Federal Estate Tax use is not
allowable for purposes of Oklahoma Estate Tax, except that a life estate for a surviving spouse may
be deducted.
710:35-5-62. Wrongful death claim
Court approved proceeds paid as a result of a "wrongful death" claim are excludable for purposes
of Oklahoma Estate Taxes. [But See: 710:35-5-1(5)(D)]
710:35-5-63. Not lineal exemptions
Neither step-grandparents nor step-grandchildren are eligible for a lineal exemption in the
Oklahoma Estate Tax Return.
710:35-5-64.
[REVOKED]
Lineal heir exemption for assets of qualifying family farm or business
[Source: Revoked at 23 Ok Reg 2815, eff 6-25-06]
PART 11. FEDERAL ESTATE TAX CREDIT AND
ADDITIONAL ASSESSMENT OF OKLAHOMA ESTATE TAX
710:35-5-70. Separate credit provision
The credit against Oklahoma Estate Tax provided for by statute on certain prior transfers may not
be used to offset any additional assessment levied to absorb federal credit pursuant to 68 O.S. §804.
[See: 68 O.S. §802.1]
710:35-5-71. Federal credit for state death taxes
The amount of the federal credit for state death taxes due the State of Oklahoma shall be adjusted,
if necessary, after determination and adjustments, if any, of the value of the property to be taxed in
this State. The percentage of the credit due this State shall be determined based on the ratio of the
adjusted value of the property in Oklahoma to the adjusted value of the total estate. [See: 68 O.S.
§804]
710:35-5-72. Interest on federal credit
Interest accruing on taxes imposed under 68 O.S. §804 shall begin nine months after date of death
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OKLAHOMA TAX COMMISSION
or thirty (30) days from the date of the Internal Revenue Service assessment letter for additional
taxes.
710:35-5-73. Adjustments affecting federal credit
Any adjustments by the IRS affecting the State Death Tax Credit shall be submitted to the
Oklahoma Tax Commission within thirty (30) days of agreed settlement along with a copy of the
revenue agents report. [See: 68 O.S. §804]
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