§ 77-2004 — Inheritance tax; rate; transfer to immediate relatives; exemption

Nebraska § 77-2004

• Jurisdiction: Nebraska
• Ch. 77: Revenue and Taxation

Text

(1) In the case of a father, mother, grandfather, grandmother, brother, sister, son, daughter, child or children legally adopted as such in conformity with the laws of the state where adopted, any lineal descendant, any lineal descendant legally adopted as such in conformity with the laws of the state where adopted, any person to whom the deceased for not less than ten years prior to death stood in the acknowledged relation of a parent, or the spouse or surviving spouse of any such persons, the rate of tax shall be:
(a) For decedents dying prior to January 1, 2023, one percent of the clear market value of the property received by each person in excess of forty thousand dollars; and
(b) For decedents dying on or after January 1, 2023, one percent of the clear market value of the property received by each person in excess of one hundred thousand dollars.
(2) Any interest in property, including any interest acquired in the manner set forth in section 77-2002 , which may be valued at a sum less than or equal to the applicable exempt amount under subsection (1) of this section shall not be subject to tax. In addition the homestead allowance, exempt property, and family maintenance allowance shall not be subject to tax. Interests passing to the surviving spouse by will, in the manner set forth in section 77-2002 , or in any other manner shall not be subject to tax. Any interest passing to a person described in subsection (1) of this section who is under twenty-two years of age shall not be subject to tax.

Legislative History

Source: Laws 1901, c. 54, § 1, p. 414; Laws 1905, c. 117, § 1, p. 523; Laws 1907, c. 103, § 1, p. 356; R.S.1913, § 6622; C.S.1922, § 6153; Laws 1923, c. 187, § 1, p. 430; C.S.1929, § 77-2201; Laws 1931, c. 132, § 1, p. 371; C.S.Supp.,1941, § 77-2201; R.S.1943, § 77-2004; Laws 1951, c. 267, § 3, p. 900; Laws 1953, c. 282, § 2, p. 914; Laws 1957, c. 337, § 1, p. 1174; Laws 1965, c. 497, § 1, p. 1585; Laws 1975, LB 481, § 31; Laws 1976, LB 585, § 4; Laws 1977, LB 456, § 1; Laws 1982, LB 480, § 4; Laws 1988, LB 845, § 1; Laws 1997, LB 16, § 1; Laws 2007, LB502, § 1; Laws 2022, LB310, § 1. Annotations: 1. Family member 2. Tax rate 1. Family member The language "any person to whom the deceased for not less than ten years prior to death stood in the acknowledged relation of a parent" is not limited in application to blood relatives, and includes parties to whom the decedent stood "in loco parentis". In determining if the requisite acknowledged parental relationship exists for purposes of this section, the following factors should guide the trial court: (1) the family, (2) assumption of the responsibility for support beyond occasional gifts and financial aid, (3) exercise of parental authority and discipline, (4) relationship by blood or marriage, (5) advice and guidance to the child, (6) sharing of time and affection, and (7) existence of written documentation evincing the decedent's intent to act as parent. In re Estate of Ackerman, 250 Neb. 665, 550 N.W.2d 678 (1996). For the purpose of determining whether a devisee under a will is a "person to whom the deceased for not less than ten years prior to death stood in the acknowledged relation of a parent" under this section, it is not necessary that there be a written acknowledgment. In re Estate of Stanton, 245 Neb. 942, 516 N.W.2d 586 (1994). Section 77-2005.01 expands the operation of this section and section 77-2005, extending the same tax treatment to the relatives of a former spouse to whom the deceased person was married at the time of the spouse's death, but in no sense conflicts with either of the other two statutes. In re Estate of Morse, 241 Neb. 40, 486 N.W.2d 195 (1992). Physical absence from home of testatrix, while attending school, did not of itself prevent stepdaughter from being member of household of testatrix for inheritance tax purposes. Wondra v. Platte Valley State Bank & Trust Co., 194 Neb. 41, 230 N.W.2d 182 (1975). Persons standing in loco parentis for ten years prior to death are within provisions of this section even though they are not relatives of the blood. In re Estate of Dowell, 149 Neb. 599, 31 N.W.2d 745 (1948). Factual findings necessary in determining whether the requisite acknowledged parent-child relationship of this section exists should be reviewed for sufficient evidence and should not be disturbed on appeal unless clearly wrong. In re Estate of Chambers, 27 Neb. App. 398, 932 N.W.2d 343 (2019); In re Estate of Sedlacek, 27 Neb. App. 390, 932 N.W.2d 91 (2019). The following factors serve as appropriate guideposts to the trial court in making a determination of an acknowledged relationship of a parent under this section: (1) reception of the child into the home and treatment of the child as a member of the family, (2) assumption of the responsibility for support beyond occasional gifts and financial aid, (3) exercise of parental authority and discipline, (4) relationship by blood or marriage, (5) advice and guidance to the child, (6) sharing of time and affection, and (7) existence of written documentation evincing the decedent's intent to act as parent. In re Estate of Chambers, 27 Neb. App. 398, 932 N.W.2d 343 (2019); In re Estate of Sedlacek, 27 Neb. App. 390, 932 N.W.2d 91 (2019). Even though a natural parent-child relationship may exist elsewhere, if the parties regard each other in all of the usual incidents and relationships of family life as parent and child, the benefits of this section should be allowed. In re Estate of Malloy, 15 Neb. App. 755, 736 N.W.2d 399 (2007). The burden is on the taxpayer to show that he or she clearly falls within the statutory language. In re Estate of Malloy, 15 Neb. App. 755, 736 N.W.2d 399 (2007). Persons standing in loco parentis are within the intent and scope of this section. The fact that a parent-child relationship may start when both parties are adults, or may begin when the child is a minor and continue after that child reaches adulthood, is not a bar to a claim brought under this section. While a child's residence is necessarily a factor to be considered in determining whether a parent-child relationship exists for purposes of this section, it is not the only factor. In re Estate of Quinn, 1 Neb. App. 1025, 510 N.W.2d 488 (1993). 2. Tax rate Clear market value is measured by the fair market value of the property as of the date of the death of the grantor, less the consideration paid for the property. In re Estate of Craven, 281 Neb. 122, 794 N.W.2d 406 (2011). An inheritance by the widower of a daughter is not taxable at the rate prescribed by this section. Todd v. County of Box Butte, 169 Neb. 311, 99 N.W.2d 245 (1959). For purpose of inheritance tax, property should be valued at amount of money which it would produce if offered and sold for cash at time of death of decedent. In re Woolsey's Estate, 109 Neb. 138, 190 N.W. 215 (1922). Law abolishing estates of dower and curtesy gives surviving spouse enlarged estate of same kind and nature as that of dower or curtesy, and, like dower, is not subject to inheritance tax. In re Estate of Strahan v. Wayne County, 93 Neb. 828, 142 N.W. 678 (1913). Where widow elects to take under the will, her interest, to extent of statutory interest, is exempt from tax. In re Estate of Sanford, 91 Neb. 752, 137 N.W. 864 (1912).