Indiana Inheritance Tax General (Instructions)

Inheritance Tax General (Instructions)
Form IH-6INST
Instructions for Completing
Indiana Inheritance Tax Return
This form does not need to be completed for those individuals
dying after Dec. 31, 2012. For those individuals dying before
Jan. 1, 2013, this form may need to be completed.

See 45 Ind. Admin. Code 4.1-3-5(b) for an acceptable form for
the Indiana QTIP election. Once made, the QTIP election is
irrevocable.

Who Must File

2. Supplemental Documents
You must attach all supplemental documents used to substantiate
the statements contained in the return to the back of the return
when you file it. Examples include appraisals, trusts, affidavits,
disclaimers, elections, death certificates, and all other documents
necessary to complete the audit of the return.

The personal representative of the estate of an Indiana resident
must file the inheritance tax return (Form IH-6). If there is no
personal representative, one of the following must file: an heir, a
trustee, a joint owner, or another transferee. No filing is required
if the total fair market value of the property interests transferred
by the decedent to each transferee under a taxable transfer(s) is
less than the exemption provided to each transferee. Only one
return should be filed per decedent.

3. Power of Attorney
If the preparer is not a lawyer or a transferee of the decedent’s
estate and the personal representative wants the department to
disclose information to the preparer, a completed Form IH-28,
power of attorney, must be provided.

When to Use This Form

Use this form only if the decedent was a resident of the State of
Indiana at the time of death. For a nonresident decedent, use
Form IH-12, available at www.in.gov/dor/3509.htm; contact the
Indiana Department of Revenue, P.O. Box 71, Indianapolis, IN,
46206-0071, or call (317)232-2154 or email
[email protected] for a copy of Form IH-12.

4. Dollar Amounts
Dollar amounts may be rounded to the nearest dollar.
5. Fair Market Value
All property transferred should be valued at the fair market value
on the date of the decedent’s death except when the alternative
valuation is properly elected, used, and accepted for federal
estate tax purposes; then the alternative valuation should also
be used for inheritance tax. The fair market value is the price
to which a willing buyer and a willing seller agree, neither being
under compulsion to buy or sell and both being fully aware of
all relevant facts surrounding the exchange. Attach a copy of all
appraisals or closing statements for such real estate to the return.

When to File This Form

This form must be filed within 9 months of the date of death. If
the Indiana Department of Revenue determines that, due to an
avoidable delay, the tax cannot be determined within 9 months,
the department may extend the period for filing. Without an
extension, a penalty may be assessed by the department for failure
to file on time. However, an extension will not stop the accrual of
interest.

6. Additional Pages
If there is not enough space available on any page, continue the
list on an additional page and attach it immediately after such
page.

Where to File This Form

The Inheritance Tax Return must be filed with the Indiana
Department of Revenue, P.O. Box 71, Indianapolis, IN
46206-0071. Do not file Form IH-6 with an Indiana court
having probate jurisdiction.

General Instructions

Payment

Page One

The resident inheritance tax is to be paid to the Indiana
Department of Revenue, P.O. Box 71, Indianapolis, IN
46206-0071. There is a 5% discount for payments made within
9 months of the decedent’s date of death. Payments made more
than 1 year after the date of death accrue interest at 10% per
year from the date of death until the date of payment. If the
department determines that, due to an unavoidable delay, the tax
cannot be determined within 12 months, the department may
reduce the interest rate to 6%.

You must place the decedent’s Social Security number in box 3.
If the decedent died testate, attach a copy of the will to the return.
If the decedent died intestate, check the box in item 10.
Even if no U.S. Estate Tax Return (Form 706) is required to be
filed, you must check the appropriate box at item 12. If a Form
706 is filed with the Internal Revenue Service, you are also
required to file a copy with the Indiana Department of Revenue.

Additional Requirements
1. QTIP Election
If you elect to treat property passing from the decedent as
property transferred directly to the surviving spouse for Indiana
inheritance tax purposes, the election must be made in writing
and attached to the original return. Electing on the U.S. Estate
Tax Return (Form 706) is not an election on this return.

Page Two — Inheritance Tax Computation

List all persons, including corporations and other organizations,
receiving an interest from the decedent no matter how the
transfer took place. Also list the current address of each
beneficiary. If the space provided is not adequate to list all
beneficiaries, attach additional pages immediately after this page.
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For individuals dying after June 30, 2012, a transfer to a
partnership, a limited partnership, a limited liability partnership,
an association, a corporation, a limited liability company, a trust,
or a similar entity will be considered a transfer to each individual
with a beneficial (whether discretionary or not) or ownership
interest in the entity. Each individual is liable for a percentage of
taxes imposed equal to that individual’s beneficial or ownership
interest in that entity. List the name and address of the entity
and each beneficiary or owner of the entity and their respective
percentage of beneficial or ownership interest in the entity. Please
contact a professional who is familiar with inheritance tax matters
or the department’s Inheritance Tax Division for clarification on
the taxation of transfers to such entities.

For dates of death after Dec. 31, 2011, the following exemptions
apply:
1.	 Surviving spouse and charitable organizations are 100%
exempt
2.	 Class A
Parents, children, stepchildren, spouse, widow, widower
of a child or stepchild (sons-in-law or daughters-in-law),
grandparents, grandchildren, other lineal ancestors,
and lineal descendants, and children adopted prior to
emancipation..............................................................$250,000
3.	 Class B
Brothers, sisters, and lineal descendants of brothers or sisters
(blood nieces and nephews) .....................................	$500
4.	 Class C
Anyone not listed above including, but not limited to aunts,
uncles, cousins, friends, nieces, and nephews by marriage	
$100

In the next column list the relationship of the beneficiary to the
decedent. Include enough information to determine the class to
which the beneficiary belongs. For example: Lisa Smith, niece,
daughter of decedent’s brother. Also list the entire birth date of
each beneficiary. Failure to completely describe the relationship
or to list the birth date can significantly slow the audit of the
return.

Enter in the final column the amount of inheritance tax due
for each beneficiary. Compute the amount of tax due for each
beneficiary by multiplying that beneficiary’s net taxable interest
(i.e., the total value of interest minus the applicable exemption)
by the appropriate tax rate. The inheritance tax rates are listed in
the following tables.

When stating the value of interest each beneficiary is to
receive (column 3), list the total value of the property interests
transferred to each beneficiary.

Class A

The amount of each beneficiary’s exemption (column 4) is
determined by the relationship of that beneficiary to the decedent.
Net Taxable Value of
Property Interests
Transferred

For dates of death after July 1, 1997, but before Jan. 1, 2012, the
following exemptions apply:
1.	 Surviving spouse and charitable organizations are 100%
exempt.
2.	 Class A
Parents, children, grandparents, grandchildren, and other
lineal ancestors and lineal descendants and persons legally
adopted before emancipation....................................$100,000
*For deaths after June 30, 2004, stepchildren are Class A.
*For adoptions completed before July 1, 2004, adopted
persons adopted after emancipation are Class A.
3.	 Class B
Brothers, sisters, lineal descendants of brothers or sisters,
daughters-in-law, and sons-in-law...........................$500
4.	 Class C
Anyone not listed above including, but not limited to aunts,
uncles, cousins, friends, nieces, and nephews by marriage	
$100

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Inheritance Tax

$25,000 or less

1% of net taxable value

Over $25,000 but not over
$50,000

$250 plus 2% of net taxable
value over $25,000

Over $50,000 but not over
$200,000

$750 plus 3% of net taxable
value over $50,000

Over $200,000 but not over
$300,000

$5,250 plus 4% of net taxable
value over $200,000

Over $300,000 but not over
$500,000

$9,250 plus 5% of net taxable
value over $300,000

Over $500,000 but not over
$700,000

$19,250 plus 6% of net taxable
value over $500,000

Over $700,000 but not over
$1,000,000

$31,250 plus 7% of net taxable
value over $700,000

Over $1,000,000 but not over
$1,500,000

$52,250 plus 8% of net taxable
value over $1,000,000

Over $1,500,000

$92,250 plus 10% of net
taxable value over $1,500,000

Class B
Net Taxable Value of
Property Interests
Transferred

List all mortgages and notes payable to the decedent at the time
of death, with the following information: (1) the face value and
unpaid balance, including interest to the date of death; (2) the
date of the mortgage or note; (3) the date of maturity; (4) the
name of the maker; and (5) the interest date and interest rates.

Inheritance Tax

$100,000 or less

7% of net taxable value

Over $100,000 but not over
$500,000

$7,000 plus 10% of net taxable
value over $100,000

Over $500,000 but not over
$1,000,000

$47,000 plus 12% of net
taxable value over $500,000

Over $1,000,000

$107,000 plus 15% of net
taxable value over $1,000,000

List all stocks and bonds that the decedent owned in his or her
name alone on the date of death. For stocks, describe: (1) the
number of shares; (2) whether common or preferred; (3) the price
per share; (4) the exact name of the corporation; (5) the principal
exchange upon which sold, if listed on any exchange; and (6)
the CUSIP number, if available. The price per share is the mean
between the highest and lowest selling prices quoted on the date
of the decedent’s death. For bonds, describe: (1) quantity and
denomination; (2) number of the obligor; (3) date of maturity; (4)
interest rate; (5) interest due date; (6) principal exchange, if listed
on an exchange; and (7) CUSIP number, if available. List the
interest and any dividends for each separately.

Class C
Net Taxable Value of
Property Interests
Transferred

Inheritance Tax

$100,000 or less

10% of net taxable value

Over $100,000 but not over
$1,000,000

$10,000 plus 15% of net
taxable value over $100,000

Over $1,000,000

$145,000 plus 20% of net
taxable value over $1,000,000

List any life insurance policies on the decedent’s life that were
payable to the decedent’s estate. Enclose a copy of Form 712 with
the return.
List on this schedule any contract by the decedent to sell real
estate. List the name of the purchaser, the date of the contract, a
brief description of the real estate, the selling price, interest rates,
and the unpaid balance of principal and interest at the time of
the decedent’ death. Include a copy of the contract with the filed
return.

Page Three — Schedule A — Real Estate

List every parcel of Indiana real property in which the decedent
had any right, title, or interest at the time of death and which was
transferred at death by will or by intestate succession. Include real
property that the decedent was buying on contract at the time
of death. Do not include real property held jointly with rights of
survivorship with one or more persons, real property held by the
entireties, real property held in a trust, or real property that the
decedent was selling on contract on this page because it will be
reported on other schedules.

Page Five — Schedule C — Other Miscellaneous
Property Transferred by Will or Intestate Law
Schedule C is a catchall. All other personal property, either
tangible or intangible, that the decedent owned individually
at the time of death and that is transferred by will or intestate
succession at death is to be listed here, including but not limited
to:

Describe the property in enough detail so that it can be identified
for valuation. Example: If the will refers to the property as
“the Smith Farm,” that land should be listed as “the Smith
Farm” followed by its legal description on Schedule A. If the
real property is transferred in two or more parcels to different
transferees, each parcel should be separately valued on this
schedule. To assist in auditing the return, include the parcel
number along with the real estate description and address.

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Page Four — Schedule B — Cash, Deposits,
Mortgages, Notes, Stocks and Bonds, Life
Insurance Payable to the Estate

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List all of the monies that the decedent owned in his or her name
alone, whether in his or her immediate possession or standing in
his or her credit in any holding institution no matter where that is
located. List the name of the holding institution, type of account
(i.e., savings, checking, certificate of deposit, money market, etc.),
account number, amount in the account, and any interest that
accrued at the decedent’s death.
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Household goods
Automobiles
Works of art
Books
Silverware
Growing crops
All partnership and unincorporated business interests may
have in the estate or trust
Any beneficial interest decedent of another
Clothing
Jewelry
Boats
Livestock
Farm machinery
Royalty interests
Any refunds due the decedent at death or because of death
Any other property interest that the decedent solely owned
and that are not listed on the two preceding schedules

taxability of such transfers. Include supporting documents
with the return.

This schedule does not include property the decedent owned
jointly or that was transferred by some means other than by
will or by intestate succession (for example, by beneficiary
designation).

4.	 Transfers Intended to Take Effect in Possession or
Enjoyment at or after Death
List all property transferred by the decedent for less than
full consideration if the transferee did not receive full
possession and enjoyment of such property until at or after
the decedent’s death. This includes property the decedent
transferred subject to a retained life estate. You must value
such property at full fair market value at the time of the
decedent’s death. Example 1: John deeds his farm to Mary
and Sam in 1970, retaining a life estate in the property. In
2012, when John dies, the full fair market value of the farm
is included in John’s estate for inheritance tax purposes.
Example 2: John opens a bank account designating Mary as
the beneficiary of such bank account at his death.

Page Six — Schedule D — Annuities, Pensions,
Retirement Plans, and Other Death Benefits
List all annuities, pensions, retirement plans, and other death
benefits to which the decedent had a right at his or her death.
Identify the payee or beneficiary of each annuity or pension plan.
To calculate the present value of installment payments, use the
Oct. 1, 1988, unisex 10% actuarial tables.

Page Seven — Schedule E — Transfers Other than
by Will or Intestate Law

5.	 Transfer on Death or Payable on Death
List all property, real or personal, which is designated as
“transfer on death” (TOD) or “payable on death” (POD) at
the fair market date of death value.

Any transfer of property interest from the decedent to a
transferee that is completed at death and is not transferred by will
or by intestate succession should be listed on this schedule:
1.	 Trust
Assets the decedent transferred into a trust prior to death
may be subject to the Indiana Inheritance Tax. List every
asset of the decedent’s trust on this schedule. Include all
Indiana property held in the trust but not out-of-state real
property. These assets are to be valued at their fair market
value on the date of the decedent’s death or on the alternative
valuation date if properly elected on Form 706 and accepted
by the IRS. Include a copy of the instrument creating the
trust with the return.

6.	 Joint Tenancies with Rights of Survivorship
All property, whether real or personal, in which the decedent
held an interest at the time of death as a joint tenant with
rights of survivorship must be entered on this schedule.
Describe the joint property and list the names of the joint
tenants.
Include the full fair market value of the jointly owned
property on Schedule E. If you believe that less than the full
value of the entire property is includible for tax purposes,
you must establish your right to exclude part of the value.
Enclose any documentation that might substantiate the use
of the lesser value with the return.

2.	 Power of Appointment
List all property interests that are transferred at the
decedent’s death by the decedent’s exercise of any power of
appointment or by the decedent’s failure to exercise such
power vested in him or her. Include a brief statement of the
source of the power, and include a copy of the instrument
with the return.

Page Eight — Schedule F — Deductions
All lawful claims against the decedent’s estate and necessary costs
of administering the estate may be deducted from the value of
property interests transferred by the decedent by will, by intestate
law, or by trust. If the value of the deductions exceeds the
property interest transferred by will, by intestate law, and by trust,
the remaining value may be deducted from property interests
transferred by other means providing these expenses are actually
paid from those assets.

3.	 Transfers in Contemplation of Death
List all transfers of real or personal property the decedent
made by deed, gift, or bargain sale in contemplation of death.
Also list all transfers within one year prior to death. Indicate
the date of each transfer, the name of each transferee, the
type of property interest transferred, and the fair market
value of the property interest transferred as of the date of
transfer.

The following items may be deductible:
•	 Decedent’s funeral expenses
•	 Reasonable attorney fees, personal representative fees, and
trustee fees for administration of property subject to Indiana
Inheritance Tax
•	 Lawful debts the decedent died owing
•	 Amounts, not to exceed $1,000, paid for a memorial for
decedent
•	 The amount of any allowance paid to decedent’s spouse or
family pursuant to Ind. Code 29-1-4-1

Transfers within the year preceding death are presumed to
have been made in contemplation of the death. However,
this presumption is rebuttable. To rebut the presumption,
set forth all facts necessary for a proper determination of the

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Taxes on the decedent’s real property that is subject to the
Indiana Inheritance Tax, if the taxes were a lien on the real
property at the time of the decedent’s death
Taxes on the decedent’s personal property that is subject to
the Indiana Inheritance Tax if such taxes were due and owing
at the time of the decedent’s death
Unpaid individual income taxes, both federal and state, on
the decedent’s income to date of death
Inheritance, estate, or transfer taxes imposed by other states
with respect to property that is also subject to the Indiana
Inheritance Tax. This does not include any federal estate tax
or fiduciary income taxes
Any mortgage that is a lien against real property that is
subject to Indiana Inheritance Tax

Nondeductible items include, but are not limited to, the
following:
•	 Fiduciary income taxes
•	 Funeral flowers
•	 Federal estate tax
•	 Estimated selling expenses of unsold real estate
•	 Expenses connected with property not subject to Indiana
Inheritance Tax
•	 Funeral dinners
•	 Traveling expenses for beneficiaries, or others, to attend the
decedent’s funeral
•	 Income tax incurred by the estate or beneficiaries upon
liquidating or receiving estate property (for instance, income
tax on an annuity or a retirement account)
•	 Indiana Inheritance Tax incurred as a result of a decedent’s
death

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