What Assets Are Subject to Oregon Estate Tax?

Oregon imposes an estate tax on certain assets when someone passes away, which can impact what beneficiaries receive. Unlike federal estate taxes, Oregon’s applies to estates valued at $1 million or more, a relatively low threshold. Understanding which assets are subject to this tax is essential for estate planning.

Several types of property are included in the taxable estate, from real estate to financial accounts and intangible assets. Proper planning can reduce the tax burden and help heirs retain more of the estate.

Real Property in Oregon

Oregon estate tax applies to real property located within the state, regardless of where the deceased lived. This includes residential homes, rental properties, commercial buildings, farmland, and undeveloped land. The taxable value is based on fair market value at the time of death, determined through appraisals, recent comparable sales, or county tax assessments.

Ownership structure affects taxation. Property solely in the decedent’s name is fully included, while jointly owned property may be partially excluded. For example, if a married couple owns a home as tenants by the entirety, only the deceased’s share is taxed. Property in a revocable living trust remains taxable because the grantor retained control during their lifetime.

Certain deductions can lower the taxable value. If the property has a mortgage, the outstanding loan balance is subtracted. Farmland or forestland may qualify for special valuation if heirs continue agricultural or timber operations, potentially reducing estate tax liability.

Tangible Personal Property

Oregon’s estate tax applies to physical assets owned at the time of death, including vehicles, jewelry, artwork, furniture, and collectibles. These items are valued at fair market price, meaning what they would sell for, not their original purchase price. High-value items like antiques or rare collectibles may require appraisals.

Household goods and personal effects can add up, particularly if the deceased owned luxury items such as designer handbags, watches, or high-end electronics. Firearms, recreational vehicles, and boats are also included, with valuations based on recent sales or professional appraisals.

Business-related tangible assets, such as machinery, equipment, or inventory, are taxable if personally owned rather than held within a separate business entity. For sole proprietors, the value of business assets—such as delivery vans or specialized tools—counts toward the estate’s total, which can push it above Oregon’s $1 million exemption threshold.

Intangible Assets

Oregon’s estate tax also applies to intangible assets, including investments, financial accounts, and intellectual property. These assets are typically valued based on financial statements, market prices, or projected future earnings.

Stocks, Bonds, and Ownership Interests

Publicly traded stocks and bonds are included at their market value on the date of death. If their value declines significantly, the estate may use an alternate valuation date six months later, as allowed under federal tax law, to reduce tax liability.

Privately held business interests, such as shares in a family-owned corporation, partnership, or LLC, are also taxable. Valuing these interests is complex since they are not publicly traded. Appraisers may use the income approach, which considers expected future earnings, or the market approach, which compares similar businesses that have been sold. Discounts for lack of marketability or minority ownership may apply, reducing the taxable value.

Banking and Brokerage Accounts

Cash in checking, savings, and money market accounts is fully included in the taxable estate, valued based on the account balance at the date of death. Certificates of deposit (CDs) are included at their principal amount plus accrued interest.

Brokerage accounts containing stocks, mutual funds, or exchange-traded funds (ETFs) are taxed based on the total market value of the holdings. If the account is jointly owned, only the deceased’s share is included. For example, if a brokerage account is jointly held with a spouse, typically only 50% of the account’s value is subject to estate tax.

Oregon does not impose a separate inheritance tax, meaning beneficiaries do not pay tax on what they receive. However, the estate must settle any taxes owed before distributions are made.

Certain Intellectual Property

Intellectual property, such as patents, copyrights, trademarks, and royalties, is taxable if it generates income or has market value. Patents may be valued based on projected earnings from licensing agreements or product sales. Copyrights on books, music, or other creative works can hold significant worth, particularly if they continue to generate royalties.

Valuing intellectual property requires specialized appraisers who consider historical earnings, market demand, and the remaining duration of legal protections. For example, a patent expiring in five years is worth less than one with 15 years remaining. Estates that include ongoing royalty payments must account for their impact on taxable value. Transferring intellectual property into a trust may help manage tax exposure.

Retirement Accounts and Insurance Proceeds

Oregon estate tax applies to certain retirement accounts depending on how they are structured and whether the deceased retained control over the assets. Tax-deferred accounts such as traditional IRAs, 401(k)s, and 403(b)s are included at their full value as of the date of death. Since these accounts have not been taxed at the federal level, beneficiaries may also owe income tax when taking distributions. Roth IRAs, while included in the estate, do not carry the same income tax burden for heirs due to their post-tax contribution structure.

Life insurance proceeds are only subject to estate tax if the deceased owned the policy. If the policyholder had control—such as the ability to change beneficiaries, borrow against the policy, or surrender it for cash—the full death benefit is included in the taxable estate. One way to avoid this is by placing the policy in an irrevocable life insurance trust (ILIT), which removes it from the estate as long as the transfer occurs at least three years before death.

Nonresident Estates with Oregon Assets

Oregon estate tax applies to nonresidents who own certain assets within the state. If an individual living outside Oregon holds real property, tangible personal property, or business interests located in the state, those assets are subject to taxation upon their passing. The taxable portion of the estate is determined based on the ratio of Oregon-based assets to the total estate value.

For example, if a nonresident owns a vacation home in Bend valued at $800,000 and their total estate is worth $4 million, 20% of their estate would be subject to Oregon estate tax. Business interests can also create tax exposure if the deceased owned a sole proprietorship or partnership operating in the state. However, intangible assets like stocks or bank accounts held in Oregon financial institutions are generally not taxed for nonresidents, as they are considered to have no fixed location.

Proper estate planning, such as transferring Oregon-based real estate into an out-of-state trust or business entity, may help reduce tax liabilities for nonresidents.