Fill in Your Kentucky Inheritance Tax Form

Fill in Your Kentucky Inheritance Tax Form

The Kentucky Inheritance Tax form, an integral part of estate administration for residents and non-residents with assets in Kentucky, plays a crucial role in determining whether an inheritance tax or estate tax is owed to the Commonwealth of Kentucky for dates of death on or after January 1, 2005. This form, alongside specific instructions, ensures that assets passing to exempt beneficiaries are properly reported, thereby potentially obviating the need for a more extensive inheritance tax return. To ease the burden of this process and ensure compliance with Kentucky’s tax laws, interested parties are encouraged to click the button below to fill out and submit the necessary forms with accuracy.

Open Kentucky Inheritance Tax Editor Here

In navigating the complexities of post-mortem financial obligations within the Commonwealth of Kentucky, the Kentucky Inheritance Tax form serves as a pivotal document for executors and beneficiaries alike. This form, pertinent for estates of individuals who passed on or after January 1, 2005, encompasses a range of instructions and requirements essential for the proper administration of a decedent's estate in compliance with the state’s tax laws. The Kentucky Department of Revenue, tasked with overseeing the collection of taxes and enforcement of tax laws, provides detailed guidelines on tax exemptions, the filing of returns, and various forms associated with the tax process. For estates that pass assets to exempt beneficiaries or do not meet the federal threshold for estate and gift tax filings, an Affidavit of Exemption may suffice in lieu of a full inheritance tax return. The forms include several variations, such as the No Tax Due Return (Form 92A201) for estates exempt from Kentucky inheritance tax, Inheritance Tax Return forms for resident and nonresident estates (Form 92A200 and Form 92A205), and additional documentation for special circumstances like electing to defer tax payments or valuing real estate. This suite of forms and instructions ultimately guides individuals through the process of fulfilling the state's requirements for estate settlement, ensuring both the rights of beneficiaries and the interests of the Commonwealth are respected and upheld.

Kentucky Inheritance Tax Example

Kentucky

Inheritance and Estate Tax

Forms and Instructions

COMMONWEALTH OF KENTUCKY

DEPARTMENT OF REVENUE

For Dates of Death on or After January 1, 2005

(Revised February, 2018)

Kentucky Department of Revenue

Mission Statement

As part of the Finance and Administration Cabinet, the mission of the Kentucky Department of Revenue is to administer tax laws, collect revenue, and provide services in a fair, courteous, and efficient manner for the benefit of the Commonwealth and its citizens.

* * * * * * * * * * * * *

The Kentucky Department of Revenue does not discriminate on the basis of race, color, national origin, sex, age, religion, disability, sexual orientation, gender identity, veteran status, genetic information or ancestry in employment or the provision of services.

NOTICE

If all taxable assets pass to exempt beneficiaries and a Federal Estate and Gift Tax Return is not required, it is not necessary to file an InheritanceTax Return with the Kentucky Department of Revenue. An affidavit of exemption will be accepted for the final settlement and closing of the administration of an estate. If inheritance tax is due the Commonwealth of Kentucky, Form 92A200 or 92A205 should be used.

The affidavit of exemption is to be filed only with the court. Do not send a copy of the affidavit to the Kentucky Department of Revenue.

Sample Affidavit of Exemption

AFFIDAVIT OF EXEMPTION

Affiant ____________________________ , being first duly sworn, states that he/she is fiduciary or beneficiary of the

estate of _______________________________ , who died on the _______ day of __________________ , _______ , a resident

of _________________________ County, Kentucky.

Affiant states that all assets of the estate pass to exempt beneficiaries pursuant to Kentucky Revised Statute 140.080* or exempt organizations pursuant to Kentucky Revised Statute 140.060** either by virtue of the decedent’s will, the intestate laws of this state, or by contract (survivorship, payable on death, trust, etc.).

Affiant further states that a Kentucky Inheritance Tax Return will not be filed since no death tax is due the state and a Federal Estate and Gift Tax Return (Form 706) is not required to be filed because the gross estate is less than the required amount set out in Section 2010(c) of the Internal Revenue Code. This affidavit is being submitted to satisfy the requirements of Kentucky Revised Statute 395.605.

__________________________________________________________

Signature

Witness my hand this ________ day of __________________________ , __________ .

Sworn and subscribed to before me by _____________________________________

this _______ day of ____________________________________________ , __________ .

______________________________________________________ Notary Public

My commission expires______________________________________

*Exempt beneficiaries under KRS 140.080 include spouse, children, stepchildren, grandchildren, parent, brother, and sister.

**Exempt organizations include educational, religious or other institutions, societies, or associations, whose sole purpose is to carry on charitable, educational, or religious work. Also, cities, towns or public institutions in this state qualify as exempt organizations provided that any transfer to such an organization is for public purposes.

WHAT’S INCLUDED

INHERITANCE AND ESTATE TAX FORMS

No Tax Due Return (resident and nonresident) and Instructions (Form 92A201) Inheritance Tax Return (resident and nonresident) (Form 92A200)

Inheritance Tax Return (short form) (resident and nonresident) (Form 92A205) Real Estate Valuation Information Form (Form 92A204)

Election to Qualify Terminable Interest Property and/or Power of Appointment Property (Form 92A936) Election to Defer the Payment of Inheritance Tax Through Installments (Form 92A928)

Affidavit of Exemption (Form 92A300) Inheritance Tax Table for Resident Decedent Inheritance Tax Table for Nonresident Decedent Blanket Consent

GENERAL INFORMATION

 

Supplemental Documents

1

Payment of Tax

 

Discount

1

Installment Payments

1

Interest

1

Penalties

1

Property to be Included on the Return

1

Valuation of Property—Fair Cash and Agricultural

2

Deductions

2

Federal Estate Tax

2

Qualified Terminable Interest Property (QTIP) and/or Powers of Appointment (POA)

2

Property Previously Taxed

2

Example of Credit for Previously Taxed Property

3

Distribution

4

Exemptions for Beneficiaries of a Resident Decedent

4

Exemptions for Beneficiaries of a Nonresident Decedent

5

Bequest of Tax

5

Property Set Aside Under KRS 391.030(1)(c)

5

Estate Tax

5 & 6

Value of a Life Estate

6

Amended Return

7

Acceptance Letter

7

Protest and Appeal

7

Helpful Hints

 

Where to Obtain Assistance

7

Reporting of Intangible Property Tax

7

Fiduciary Return

7

Office of the Taxpayer Ombudsman

7

Website for Forms

7

Definitions

8 & 9

Taxpayer Service Centers Locations and Phone Numbers

10

Kentucky Taxpayers Bill of Rights

inside back cover

INHERITANCE AND ESTATE TAX FORMS IN THIS PACKET

The forms in this packet should only be used if the date of death occurred on or after January 1, 2005.The forms may be dupli- cated on a computer and the space allocated for each item may be decreased or increased depending on the amount of space required. The forms may be used for a decedent who was a resident or a nonresident of Kentucky.

If all taxable assets pass to exempt beneficiaries and a Federal Estate and Gift Tax Return is not required, it is not neces- sary to file an Inheritance Tax Return with the Kentucky Department of Revenue (DOR). An Affidavit of Exemption will be accepted for the final settlement and closing of the administration of an estate. If inheritance tax or estate tax is due the Commonwealth of Kentucky, Form 92A200 or 92A205 should be used.

If the date of death occurred prior to January 1, 2005, contact the Financial Tax Section, Department of Revenue, Station 61, 501 High Street, Frankfort, KY 40601-2103, (502) 564-4810, fax (502) 564-2695.

Three forms are included in this booklet. Choose one unless an Affidavit of Exemption is used.

1.No Tax Due Return (Form 92A201)

This return may be used for an estate (Kentucky resident or nonresident) if: (1) there is no Kentucky inheritance tax due, (2) the date of death is on or after January 1, 2005, and (3) the entire estate passes to beneficiaries listed in the following group either by contract (survivorship, payable on death, trust, etc.), the decedents will, or the intestate laws of this state:

(1)Surviving spouse, parent

(2)Child (adult or infant)

child by blood, stepchild, child adopted during infancy, or child adopted during adulthood who was reared by the decedent during infancy

(3) Grandchild

issue of child, stepchild, child adopted during infancy, or of a child adopted during adulthood who was reared by decedent during infancy

(4) Brother, sister (whole or half)

฀  Refer to KRS 140.080 for (1) through (4) above

(5) Exempt organizations—Refer to KRS 140.060

Exempt organizations include educational, religious or other institutions, societies, or associations, whose sole purpose is to carry on charitable, educational, or religious work. Also, cities, towns or public institutions in this state qualify as exempt organizations provided that any transfer to such an organization is for public purposes.

2.Inheritance Tax Return (Form 92A200)

This return must be used for an estate (resident or nonresident) when: (1) the date of death is on or after January 1, 2005, and (2) any assets of the estate pass to taxable beneficiaries or taxable organizations, or when Forms 92A201 and 92A205 do not apply.

Instructions are on the back of each schedule.

3.Inheritance Tax Return (Short Form) (Form 92A205)

This return may be used for an estate (Kentucky resident or nonresident) when : (1) a federal estate tax return is not re- quired to be filed, (2) the assets of the estate consist of 10 items or less, (3) no gifts or transfers where made within three years of death without full consideration, (4) no real or personal property was transferred with a retained life interest, (5) the decedent did not possess any power to appoint any real or personal property or have the use of any qualified terminable interest property, and (6) the decedent had not received any real or personal property from another decedent within five years and paid inheritance tax on the property.

92A201 (6-16)

Commonwealth of Kentucky

DEPARTMENT OF REVENUE

Kentucky Inheritance

Tax Return

NO TAX DUE

FOR DEPARTMENT USE ONLY

 

4

6

 

 

__ __ __ __ __ __ / __ __ / __ __ / __ __ __ __

Account Number

Tax

Mo

Year

This return may be used if: (1) there is no Kentucky inheritance tax due, (2) the date of death is on or after January 1, 2005, and

(3)the entire estate passes to beneficiaries listed in the following groups either by contract (survivorship, payable on death, trust, etc.), the decedent’s will, or the intestate laws of this state:

(1)Surviving spouse, parent

(2)Child (adult or infant)

child by blood, stepchild, child adopted during infancy,

or a child adopted during adulthood who was reared by decedent during infancy

(3)Grandchild

issue of child by blood, stepchild, child adopted during infancy,

or of a child adopted during adulthood who was reared by decedent during infancy

(4)Brother, sister (whole or half)

Refer to KRS 140.080 for (1) through (4) above

(5)Exempt organizations—Refer to KRS 140.060

Exempt organizations include educational, religious or other institutions, societies, or associations, whose sole purpose is to carry on charitable, educational, or religious work. Also, cities, towns or public institutions in this state qualify as exempt organizations provided that any transfer to such an organization is for public purposes.

Decedent’s Name Last

First

Middle Initial

Date of Death

 

 

 

 

 

Social Security Number

Occupation (If decedent was retired

Age at Death

Cause of Death

HR Code Number (if known)

 

at death, state occupation prior to

 

 

 

 

retirement.)

 

 

 

 

 

 

 

 

Residence (Domicile) at Time of Death

 

Number and Street

City

State

ZIP Code

County

 

 

 

 

 

 

Name and Address of Executor/Administrator/Beneficiary

 

Name and Address of Preparer

 

 

 

 

 

 

 

 

Exec

 

 

Atty

 

 

 

 Admr

 

 

 CPA

 

 

 

________

 

 

________

 

 

 

 

 

 

 

 

 

 

Did the decedent have a will? No Yes If Yes, attach a copy of the will.

Did the decedent have a trust agreement? No

Yes If Yes, attach a copy of the trust agreement.

Filing status of Federal Estate and Gift Tax Return for this estate (check one):

Not Required

Required (enclose copy)

Not Required, but filed for Portability (enclose copy)

Schedules for listing property (real and personal) and beneficiaries are on the reverse side of this form. Listing of property is optional. Listing of beneficiaries and their relationship is required.

Total Value of Property from Reverse Side

(optional)  $

 

 

 

 

 

 

Under criminal penalties, I declare that this return, including accompanying documents, has been examined by me, and is, to the best of my knowledge and belief, true, correct and complete.

 

 

 

 

(

)

 

 

Signature of Executor/Administrator/Beneficiary

 

Date

 

Telephone Number

 

E-mail Address

 

 

 

 

(

)

 

 

 

 

 

 

 

 

 

Signature of Preparer

 

Date

 

Telephone Number

 

E-mail Address

Mail to: Kentucky Department of Revenue, Frankfort, Kentucky 40620

92A201 (6-16)

PART I—PROPERTY (Optional Listing)

Description and Location

of Real or Personal Property

Fair Cash Value at Date of Death

Total Value of Property

PART II—BENEFICIARIES (Must be completed)

$

Name of Beneficiary

Relation to Decedent (Required)

If all taxable assets pass to exempt beneficiaries and a Federal Estate and Gift Tax Return is not filed, it is not necessary to file an InheritanceTax Return with the Kentucky Department of Revenue. An affidavit of exemption will be accepted by the courts for the final settlement and closing of the administration of an estate. If inheritance tax is due the Commonwealth of Kentucky, Form 92A200 or 92A205 should be used.

92A200 (6-16)

KENTUCKY

Commonwealth of Kentucky

INHERITANCE TAX RETURN

 

DEPARTMENT OF REVENUE

 

FOR DEPARTMENT USE ONLY

 

4

6

 

 

__ __ __ __ __ __ / __ __ / __ __ / __ __ __ __

Account Number

Tax

Mo

Year

Requirements for use of this return—This return is to be filed when (1) the date of death is on or after January 1, 2005, (2) any assets of the estate pass to taxable beneficiaries or taxable organizations, (see page 4 of general information) and (3) Forms 92A201 and 92A205 do not apply. Pursuant to KRS 140.190, the beneficiaries as well as the personal representative(s) may be held personally liable for the tax.

Return Status (check one):

Original Return

Amended Return—Refund

Amended Return—Tax Due

 

Decedent’s Name

Last

First

Middle Initial

 

Occupation (If decedent was

Age at Death

Date of Death

 

 

 

 

 

 

 

 

 

retired at death, state occu-

 

 

 

 

 

 

 

 

 

 

 

 

 

pation prior to retirement.)

 

 

 

 

 

Social Security Number

 

 

 

 

 

 

 

 

 

Cause of Death

HR Code Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residence (Domicile) at Time of Death

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number and Street

 

 

 

City

 

 

State

ZIP Code

County

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name and Address of Executor/Administrator/Beneficiary

 

 

 

Name and Address of Preparer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exec

 

 

 

 

 

 

 

Atty

 

 

 

 

 

 

 Admr

 

 

 

 

 

 

 

 CPA

 

 

 

 

 

 

 ________

 

 

 

 

 

 

 

 ________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Did the decedent have a will? No

Yes

If Yes, attach a copy of the will.

 

 

 

 

 

Did the decedent have a trust agreement? No

Yes

If Yes, attach a copy of the trust agreement.

 

 

 

 

 

 

 

 

 

 

 

 

Filing status of Federal Estate and Gift Tax Return for this estate (check one):

 

 

 

 

 

Not Required

Required (enclose copy)

Not Required, but filed for Portability (enclose copy)

 

Gross Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.

Individually owned assets

 

 

 

 

 

$

 

 

 

 

 

 

2.

Jointly owned assets

 

 

 

 

 

$

 

 

 

 

 

 

3.

Qualified terminable interest property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and/or powers of appointment

 

 

 

 

 

$

 

 

 

 

 

 

4.

Previously taxed property

 

 

 

 

 

$

 

 

 

 

 

 

5.

Gifts and transfers

 

 

 

 

 

 

$

 

 

 

 

 

 

 

 

 

Total Gross Estate

 

 

 

 

 

 

 

$

 

 

Deductions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.

Funeral expenses

 

 

 

 

 

 

$

 

 

 

 

 

 

7.

Administration expenses

......................................................................

 

 

 

 

 

$

 

 

 

 

 

 

8.

Debts of decedent

 

 

 

 

 

 

$

 

 

 

 

 

 

9.

...................................Federal estate tax— paid or  estimated

 

 

 

 

$

 

 

 

 

 

 

 

 

 

Total Deductions

 

 

 

 

 

 

 

 

$

 

 

 

 

 

Net Estate (Total Gross Estate less Total Deductions)

 

$

 

 

 

 

 

Total Tax Due from Tax Computation Form 92A200

$

 

 

Interest and Penalty

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.

Interest for late payment (see general information)

....................................................................

 

 

 

 

 

 

$

 

 

11.

Late filing penalty (see general information)

 

 

 

 

 

 

 

$

 

 

12.

Late payment penalty (see general information)

 

 

 

 

 

 

$

 

 

13.

Total Due (tax plus interest and penalties, if applicable)

 

 

 

$

 

 

14.

Total previously paid

 

 

 

 

 

 

 

 

 

$

 

 

15.

Balance due/Refund

 

 

 

 

 

 

 

 

 

$

 

Attach check payable to “Kentucky State Treasurer” to this return and mail to Kentucky Department of Revenue, Frankfort, KY 40620

Under criminal penalties, I declare that this return, including accompanying documents, has been examined by me, and is, to the best of my knowledge and belief, true, correct and complete.

( )

Signature of Executor/Administrator/Beneficiary

Social Security Number

Date

Telephone Number

E-mail Address of Executor/Administrator/Beneficiary

( )

Signature of Preparer

Date

Telephone Number

E-mail Address

Estate of:

92A200 (6-16)

 

 

 

Individually Owned Assets

Page ____ of ____

 

 

List in this schedule all items individually owned by the decedent including life insurance payable to the estate.

(Please review instructions on reverse side for details.)

Item

Description of Property/Name of Corporation

Accrued Rents/

Number

Fair Cash Value

Number

or Obligor/ Name of Bank or Debtor

Interest/Dividends

of Shares

on Date of Death

1.

Total (including continuation page(s)) (enter on page 1, line 1)

 

 

If additional space is needed, duplicate this page and attach as a continuation page(s).

 

INSTRUCTIONS

INDIVIDUALLY OWNED ASSETS

All real proper t y individually owned must b e lis ted in this schedule . For re por ting agricultural or horticultural land, see General Information—Valuation of Property—Fair Cash and Agricultural.

Stocks and bonds individually owned are includable in this schedule. Stock values are determined by using an average of the high and low quoted selling price on the decedent’s date of death. In case of inactive stock such as closely held corporations, explain the method used in computing the value at the date of death. A balance sheet, at a date nearest the decedent’s death, together with a statement of net earnings and dividends paid for the five-year period immediately preceding the date of death, must be supplied in support of these valuations (ex. financial institution’s monthly statement.)

Dividends declared and of record in the decedent’s name but not paid prior to death must be included in this schedule. Provide statements, lists, etc. supporting valuation of these assets.

United States bonds individually owned as well as those payable upon death to another should be included in this schedule. Indicate series, maturity value and date of purchase of all United States bonds.

In some instances, the estate will include stocks and bonds listed on a stock exchange that did not make sales on the date of the decedent’s death. When this occurs, their value must be determined by averaging the high and low for the last working day preceding the date of death and the first working day subsequent to the date of death. For reporting stock of a corporation owning qualified real estate passing to a qualified person(s), see General Information—Valuation of Property—Fair Cash and Agricultural.

Mortgages, notes and cash individually owned must be listed in this schedule. List accrued interest to date of death. The description of mortgages and notes must include interest rate, the date the last payment of interest was made preceding the date of the decedent’s death, and the due date

of the mortgages or notes. If an account is held out of state, show name and address of financial institution on the tax return.

List life insurance payable to the insured or to the estate. Life insurance payable to a designated beneficiary, including a testamentary or inter vivos trustee, is tax-free.

List in this schedule other individually owned items of the gross estate, such as debts due decedent; business or partnership (attach balance sheet showing capital accounts); claims, exclusive of those claimed under KRS 411.130 (wrongful death); rights; royalties; leaseholds; judgments; shares in trust funds; contracts; household goods and personal effects, including antiques, jewelry and collections of any type; farm products and growing crops; livestock; farm machinery; automobiles; etc.

The value of an annuity or other payment made to a beneficiary of a deceased employee (other than the executor or equivalent) under (1) an exempt trust or qualified nontrusted annuity plan as described by the Internal Revenue Code or (2) a contract purchased by an educational or charitable organization as referred to in Section 170(b)(1)(A)(ii) or (vi) of the Internal Revenue Code or a religious organization exempt from tax under Internal Revenue Code Section 501(a), is taxable in the proportion that the total contributions made by the decedent bears to the total contributions made. The proceeds from a Retired Serviceman’s Family Protection Plan or Survivor Benefit Plan are exempt under KRS 140.015(2). Refer to KRS 140.063(3) and (4) regarding the taxation of individual retirement accounts and annuities as described in Section 408(a) and (b) of the Internal Revenue Code. Lump-sum distributions of an IRA are taxable.

All other annuities, including deferred compensation plans, or payments other than those described in the preceding paragraph made to a beneficiary, executor or equivalent, are fully taxable if the decedent retained ownership at death such as the right to name or change the beneficiary and must be listed in this schedule.

Form Data

Fact Name Description
Applicability Date Forms are for use with dates of death on or after January 1, 2005.
Revision Date The forms were revised in February 2018.
Department Mission The mission of the Kentucky Department of Revenue, as part of the Finance and Administration Cabinet, is to administer tax laws, collect revenue, and provide services in a fair, courteous, and efficient manner.
Non-discrimination Policy The Kentucky Department of Revenue does not discriminate based on race, color, national origin, sex, age, religion, disability, sexual orientation, gender identity, veteran status, genetic information, or ancestry.
Affidavit of Exemption If all taxable assets pass to exempt beneficiaries and a Federal Estate and Gift Tax Return is not required, filing an Inheritance Tax Return with the Kentucky Department of Revenue is not necessary. An affidavit of exemption can be filed with the court for final estate settlement.
Forms Required for Tax Due If inheritance tax is owed to the Commonwealth of Kentucky, Form 92A200 or 92A205 should be used.
Included Forms The packet includes No Tax Due Return (Form 92A201), Inheritance Tax Return (Form 92A200), Inheritance Tax Return (short form) (Form 92A205), among others for various estate tax needs.
Governing Laws The inheritance and estate forms and procedures are governed by various Kentucky Revised Statutes, including KRS 140.080 for exempt beneficiaries and KRS 140.060 for exempt organizations.

How to Fill Out Kentucky Inheritance Tax

Filling out the Kentucky Inheritance Tax form is a significant step in settling an estate according to state laws. This guide will navigate the essential steps to complete either Form 92A200 (Inheritance Tax Return) or Form 92A205 (Inheritance Tax Return, Short Form) for those occasions when inheritance tax or estate tax is due to the Commonwealth of Kentucky. The process can be daunting, but a clear, step-by-step approach will simplify the completion of this important document.

  1. Determine the appropriate form based on the estate's needs. If the estate is simple, with 10 items or less and no requirement for a federal estate tax return, Form 9A205 might be appropriate. Otherwise, use Form 92A200.
  2. Gather all necessary documentation, including the decedent’s Social Security number, date of death, and a detailed list of the estate's assets and their values at the time of the decedent’s death. This will include bank statements, real estate valuations, and any other relevant financial documents.
  3. Begin by entering the decedent's full name, including the last, first, and middle initial, at the top of the form.
  4. Fill in the decedent’s Social Security number and date of death in the designated spaces.
  5. Specify the decedent’s occupation at the time of death or previous occupation if retired, including the age at the time of death and cause of death if known.
  6. Provide the full residence address of the decedent at the time of death, including the number and street, city, state, ZIP code, and county.
  7. Enter the name and address of the executor/administrator/beneficiary handling the estate. Mark the appropriate box to indicate their role (e.g., Executor, Administrator).
  8. If the decedent had a will or a trust agreement, mark 'Yes' and attach a copy of these documents. If not, mark 'No'.
  9. Check the appropriate box to indicate the filing status of the Federal Estate and Gift Tax Return for the estate. Attach a copy of the return if one was required or filed.
  10. Use the reverse side of the form to list all property (real and personal), if opting to include this information. Although listing property is optional, it may be helpful for records and transparency.
  11. Include a listing of beneficiaries, their relationship to the decedent, and their entitlements. This step is mandatory and critical for the Kentucky Department of Revenue to assess the inheritance tax properly.
  12. Calculate the total value of the property listed (if applicable) and enter this amount in the designated space.
  13. The executor/administrator/beneficiary must sign and date the form, providing their telephone number and email address for any follow-up. The preparer of the form, if different from the executor/administrator/beneficiary, should also sign and date, providing their contact information.
  14. Review the entire form for accuracy and completeness to ensure all necessary information has been provided and is correct.
  15. Mail the completed form to the Kentucky Department of Revenue at the address indicated on the form.

Completing the Kentucky Inheritance Tax form is a critical step in managing a decedent's estate. While the process requires attention to detail and accuracy, following these steps can make the task manageable. It ensures that the estate is in compliance with state laws and helps facilitate a smoother transition of assets to the beneficiaries.

Crucial Queries on This Form

Frequently Asked Questions about the Kentucky Inheritance Tax Form

  1. Who needs to file a Kentucky Inheritance Tax Return?

    If the deceased's estate has assets that pass to taxable beneficiaries or organizations, and the death occurred on or after January 1, 2005, a Kentucky Inheritance Tax Return must be filed using Form 92A200 or 92A205. However, if all assets pass to exempt beneficiaries (spouse, children, stepchildren, grandchildren, parents, siblings, or exempt organizations) and a Federal Estate and Gift Tax Return is not necessary, an Affidavit of Exemption can be filed with the court instead.

  2. What are exempt organizations for the Kentucky Inheritance Tax?

    Exempt organizations include educational, religious, or other institutions, societies, or associations dedicated solely to charitable, educational, or religious work. Additionally, cities, towns, or public institutions in Kentucky qualify if the transfer to such an organization is for public purposes. These exemptions are outlined under Kentucky Revised Statute 140.060.

  3. How is the property included in the inheritance tax return valued?

    Property to be included in the return must be valued at its fair cash and agricultural value at the time of the decedent’s death. This applies to both real estate and personal property. Certain deductions and exemptions might also affect the overall valuation.

  4. Can inheritance tax be paid in installments in Kentucky?

    Yes, the Commonwealth of Kentucky allows for the payment of inheritance tax through installments. Those who wish to take advantage of this option must submit Form 92A928 to apply for the deferral of inheritance tax payments.

  5. What should I do if I believe no inheritance tax is due?

    If the entire estate passes to exempt beneficiaries and a Federal Estate and Gift Tax Return isn't required, an Affidavit of Exemption should be filed with the court for estate settlement. This affidavit is a declaration that no inheritance tax is due to the state, negating the need for filing an Inheritance Tax Return with the Department of Revenue.

For more detailed information, assistance with specific cases, or to obtain forms, it's recommended to contact the Kentucky Department of Revenue or visit their official website.

Common mistakes

Fulfilling the obligations for the Kentucky Inheritance Tax form demands precision, yet it's common for individuals handling estate matters to overlook critical details. Here are six prevalent mistakes individuals often make when completing these forms:

  1. Not Fully Understanding Beneficiary Exemptions: Often individuals may misinterpret which beneficiaries are considered exempt from the Kentucky Inheritance Tax. Exempt beneficiaries typically include the spouse, children, stepchildren, grandchildren, parents, siblings, and specific types of organizations as detailed in the statute. Incorrectly classifying a beneficiary can lead to an unnecessary tax burden or the filing of unnecessary documentation.
  2. Incorrectly Valuing Estate Assets: Accurate asset valuation is crucial. The estate's assets need to be valued fairly to determine the actual tax liability. Overestimation can result in paying more tax than necessary, while underestimation may lead to penalties or further scrutiny from the Kentucky Department of Revenue.
  3. Failing to Attach Necessary Documents: Supporting documentation, such as a copy of the will, trust agreements, or the Federal Estate and Gift Tax Return, when required, is essential for proper processing. Neglecting to include these documents can delay the form's processing and potentially lead to inaccuracies in tax calculations.
  4. Overlooking Deductions and Credits: Many filers miss out on deductions and credits for which the estate may qualify, such as property previously taxed or transfers to exempt organizations. Overlooking these can significantly inflate the taxable amount.
  5. Not Considering Installment Payment Options: For the estates that owe taxes, there is an option to pay through installments, as outlined in Form 92A928. Ignoring this option can put unnecessary immediate financial pressure on the estate that could have been mitigated.
  6. Incorrect Filing Status for Federal Estate and Gift Tax Return: Determining whether the filing of a Federal Estate and Gift Tax Return is required is imperative. Some may incorrectly assume their estate does not meet the threshold and fail to file, or they might file unnecessarily—both of which can lead to complications or delays.

To navigate the completion of the Kentucky Inheritance Tax forms, it's imperative to approach with careful attention to detail and thorough understanding or seek professional guidance. The nuances of tax law and the complexity of estate affairs often necessitate expertise beyond the layperson's knowledge. Taking proactive steps to avoid these common mistakes can streamline the process, ensuring compliance and minimizing the estate's tax liabilities.

Ultimately, the aim is to fulfill the legal obligations accurately and efficiently, safeguarding the interests of the beneficiaries and adhering to the mandates of the Kentucky Department of Revenue. By recognizing and rectifying these potential errors, individuals can navigate the complexities of estate and inheritance tax filings with confidence and precision.

Documents used along the form

When dealing with the Kentucky Inheritance Tax Form, various additional forms and documents often supplement the primary form. These forms ensure comprehensive reporting and compliance with Kentucky's tax laws. Whether one is administering an estate or planning for one's estate, understanding these supplemental documents can help streamline the process. Here's a brief overview of other forms and documents frequently used alongside the Kentucky Inheritance Tax Form.

  • Death Certificate: A government-issued document proving the death of the decedent. It is essential for validating the occurrence of death before any inheritance procedures commence.
  • Will or Testament: This legal document specifies the decedent's wishes regarding the distribution of their estate and the care of any minor children, if applicable. It is critical for determining the distribution of assets that fall under the probate estate.
  • Trust Documents: These outline the terms of any trusts established by the decedent. Trusts may be used for various purposes, including tax planning and avoiding probate.
  • Appraisal Reports: Reports from certified appraisers that establish the fair market value of real estate, businesses, or personal property in the estate. Appraisals are necessary for accurately reporting estate asset values.
  • Financial Account Statements: Documents showing the value of bank accounts, investment accounts, retirement accounts, etc., at the time of death. These are necessary for determining the estate's total asset value.
  • Life Insurance Policies: These indicate the amount payable upon the decedent's death and the named beneficiaries. Life insurance proceeds may or may not be subject to inheritance tax, depending on the beneficiary designation.
  • Gift Tax Returns: If the decedent made any gifts that are subject to gift tax in the years preceding their death, copies of these returns should accompany the inheritance tax filing.
  • Real Estate Deeds: Legal documents that prove ownership of real estate. Deeds are necessary for the proper transfer of real property from the estate to the heirs or beneficiaries.

In dealing with the estate of a loved one, it's essential to gather and accurately complete these forms and documents. They play a critical role in ensuring that the inheritance is processed efficiently and in compliance with Kentucky law. Having a complete and accurate set of documents can also minimize the potential for disputes among heirs and beneficiaries. Estate planning and administration can be complex processes, but understanding these key documents can make navigating Kentucky's inheritance tax requirements a smoother process.

Similar forms

The Kentucky Inheritance Tax form bears similarities to the Federal Estate Tax Return, mainly due to their core function of taxing the transfer of assets at death. Both documents require detailed information about the deceased's assets, valuation of these assets, and identification of beneficiaries. The requirement to report valuation of both real and personal property, as well as exemptions based on the relationship of the beneficiary to the deceased, are shared aspects that align these two forms in their purpose to calculate taxes due upon death.

Comparable to the Gift Tax Return, the Kentucky Inheritance Tax form accounts for transfers made without expected return or compensation, primarily focusing on inheritances. While the Gift Tax Return reports transfers made during the taxpayer's lifetime, the Inheritance Tax form addresses transfers made as a result of death. Both documents ensure that transfer taxes are collected, whether these transfers occur during life or at death, preventing tax evasion through the transfer of wealth.

The Affidavit of Exemption within the Kentucky Inheritance Tax documentation is closely related to the Small Estate Affidavit used in many jurisdictions to streamline the handling of estates that fall below a certain value threshold. Both serve as tools to simplify estate settlement procedures for smaller, less complicated estates, allowing for a bypass of more complex probate proceedings. They provide a mechanism for beneficiaries to access assets more quickly when the estate is not subject to extensive tax obligations.

The State Inheritance Tax Return forms of other jurisdictions share a purpose with Kentucky’s version, even though specific rates and exemptions might vary. These forms collectively assess the tax responsibilities of an estate passing to beneficiaries, dependent upon the decedent’s state of residence and the beneficiaries' relation to the decedent. This common goal illustrates a broad effort across states to regulate the transmission of wealth at death while considering various exemptions and rates.

Similarly, the Real Estate Valuation Information Form that accompanies the Kentucky Inheritance Tax forms echoes aspects of real estate appraisal forms used in other contexts, such as mortgage lending or property tax assessment. This similarity arises from the necessity to determine the market value of real property. Accurate valuations ensure that tax calculations are based on fair and current market data, which is crucial for both tax collectors and the parties responsible for the tax payment.

The Election to Defer the Payment of Inheritance Tax form within Kentucky's documents parallels payment plan agreements available in various tax and financial settings, offering flexibility to taxpayers who face liquidity constraints. Such forms acknowledge that immediate full payment of taxes owed may be burdensome or impractical, allowing for installment payments that can ease the financial impact on an estate or its beneficiaries.

The Election to Qualify Terminable Interest Property (QTIP) and/or Power of Appointment Property form found in the Kentucky packet has similarities to federal tax forms dealing with complex estate planning strategies. These forms relate to specific tax treatments of certain assets that can impact how they are taxed and eventually distributed to beneficiaries. Both sets of documents serve as mechanisms to navigate through intricate tax rules, ensuring that estates can take advantage of available tax benefits while adhering to regulatory requirements.

Lastly, the No Tax Due Return is akin to income tax filing statuses that result in no tax liability, such as returns filed merely to report tax-exempt income. This similarity lies in the purpose of declaring that no tax payment is due despite the requirement to file the form. Both scenarios demonstrate tax compliance but lead to the conclusion that no further fiscal obligations exist for the reporting period in question.

Dos and Don'ts

When completing the Kentucky Inheritance Tax form, it is essential to follow these guidelines to ensure the process is smooth and the form is filled out accurately.

  • Do confirm the date of death falls on or after January 1, 2005, to use the forms provided.
  • Do make sure to choose the correct form based on whether the estate is passing to exempt beneficiaries or taxable beneficiaries.
  • Do attach a copy of the will or trust agreement if one existed.
  • Do accurately report the total value of the property, real and personal, on the form.
  • Do ensure that the information about the decedent’s domicile at the time of death is correctly entered.
  • Do not send a copy of the affidavit of exemption to the Kentucky Department of Revenue if all taxable assets pass to exempt beneficiaries and a Federal Estate and Tax Return is not required.
  • Do not overlook attaching a copy of the Federal Estate and Gift Tax Return, if required, or for purposes of portability.

Before submitting, double-check all entries for accuracy and completeness to avoid errors or omissions. This careful review helps to prevent potential delays in the processing of the inheritance tax form.

Misconceptions

Many people harbor misconceptions about the Kentucky Inheritance Tax form and its requirements. Understanding these can help navigate the process more efficiently. Here are ten common misunderstandings:

  • The inheritance tax and estate tax are the same. While both relate to assets passed on after death, the Kentucky inheritance tax is imposed on the recipient of the bequest, whereas the estate tax (where applicable) is levied on the entire estate before distribution.
  • All assets are subject to inheritance tax. Not all assets are taxable under Kentucky law. Certain assets that pass to exempt beneficiaries are not subject to inheritance tax.
  • Only Kentucky residents need to file. Nonresidents who own tangible property or have assets in Kentucky might also need to file an inheritance tax return with the state.
  • An affidavit of exemption is always required. An affidavit of exemption is necessary only if all assets pass to exempt beneficiaries and if a federal estate and gift tax return is not required.
  • Filing an inheritance tax return is always necessary. If the decedent's estate passes entirely to exempt beneficiaries and does not meet federal estate tax filing requirements, filing a Kentucky inheritance tax return may not be necessary, and an affidavit of exemption might suffice.
  • There is no deadline for filing the inheritance tax return. Just like other tax forms, the Kentucky inheritance tax return has a specific filing deadline that must be adhered to, to avoid penalties and interests.
  • All beneficiaries are taxed at the same rate. Tax rates and exemptions vary depending on the beneficiary's relationship to the decedent, with certain close relatives and exempt organizations typically subject to lower rates or entirely exempt.
  • Estates are too small to be taxed. Kentucky law provides for exemptions based on the relationship of the beneficiary to the decedent, not the size of the estate. However, smaller estates may fall below federal thresholds for estate tax.
  • The executor of the estate cannot file the inheritance tax return. The executor or administrator of the estate, or even a beneficiary, may file the return. The important part is that the correct form is used and accurately filled out.
  • Forms for residents and nonresidents are different. While the basis for taxation may differ between residents and nonresidents, the forms used to file a Kentucky inheritance tax return are designed to cover both resident and nonresident decedents.

Clearing up these misconceptions can lead to a smoother estate planning and administration process for all involved.

Key takeaways

When dealing with the Kentucky Inheritance Tax, it's essential to know the process and requirements. Here are 10 key takeaways that will guide you through filling out and using the Kentucky Inheritance Tax form:

  • First, understand that if the decedent's estate passes entirely to exempt beneficiaries and a Federal Estate and Gift Tax Return is not required, the Kentucky Inheritance Tax Return need not be filed. Instead, an Affidavit of Exemption may be filed for the final settlement of the estate.
  • There are three main forms included for different situations: the No Tax Due Return (Form 92A201), the Inheritance Tax Return (Form 92A200), and the Inheritance Tax Return (Short Form) (Form 92A205).
  • If the estate passes to exempt beneficiaries, including spouses, children, siblings, and certain organizations, no Kentucky inheritance tax is due, and Form 92A201 may be used.
  • The Inheritance Tax Return (Form 92A200) is required for estates passing to taxable beneficiaries or if the conditions for Forms 92A201 and 92A205 do not apply.
  • Form 92A205, the short form, is an option for estates when a federal estate tax return isn't needed, the estate is comprised of 10 or fewer items, and other specific conditions are met.
  • An affidavit of exemption should be filed with the court for estates that only pass assets to exempt beneficiaries or organizations, and a copy does not need to be sent to the Kentucky Department of Revenue.
  • For assistance, the Kentucky Department of Revenue offers various resources, including a website for forms, an Office of the Taxpayer Ombudsman, and Taxpayer Service Centers across the state.
  • It’s important to properly value the property in the estate, distinguishing between fair cash value and, if applicable, agricultural value, to accurately complete the required forms.
  • Understanding the exemptions, deductions, and qualifications for terminable interest property and powers of appointment as mentioned in the General Information section of the instruction packet can significantly impact tax liabilities.
  • Lastly, penalties, interest, and the option for installment payments or discounts for early payment are crucial details that should be reviewed carefully to understand potential financial obligations or savings.

Being informed about these key aspects will ease the process of handling the Kentucky Inheritance Tax forms and help you navigate the financial responsibilities during what can be a challenging time.

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