140.080 Exemptions of inheritable interests

140.080 Exemptions of inheritable interests.

(1) The following exemptions chargeable against the lowest bracket or brackets of

inheritable interests shall be free from any tax under the preceding provisions of this

chapter:

(a) Surviving spouse, total inheritable interest. Effective as to decedents dying

after August 1, 1985, notwithstanding anything in this chapter to the contrary,

if the decedent's personal representative (or trustee or transferee, absent a

personal representative) shall so elect, the spouse's inheritable interest shall

include the entire value of any trust or life estate which is in a form that

qualifies for the federal estate tax marital deductions under section 2056(b)(5)

or 2056(b)(7) of the Internal Revenue Code of 1954, as amended through

December 31, 1984, regardless of whether or not the federal estate tax marital

deduction is elected by the decedent's personal representative. To be valid, the

election referred to in the sentence immediately preceding must be made in

the form prescribed by the Department of Revenue and must be filed on or

before the due date of the tax return (plus extensions) or with the first tax

return filed, whichever last occurs;

(b) Class A beneficiaries as defined in KRS 140.070, other than the surviving

spouse, of estates of decedents dying prior to July 1, 1995, as follows:

1. Infant child by blood or adoption, $20,000;

2. Child by blood who has been declared mentally disabled by a court of

competent jurisdiction, $20,000;

3. Child adopted during infancy who has been declared mentally disabled

by a court of competent jurisdiction, $20,000; or a

4. Child adopted during adulthood who was reared by the decedent during

infancy and who has been declared mentally disabled by a court of

competent jurisdiction, $20,000;

5. Parent, $5,000;

6. Child by blood, $5,000;

7. Stepchild, $5,000;

8. Child adopted during infancy, $5,000;

9. Child adopted during adulthood who was reared by the decedent during

infancy, $5,000; or a

10. Grandchild who is the issue of a child by blood, the issue of a stepchild,

the issue of a child adopted during infancy or the issue of a child

adopted during adulthood who was reared by the decedent during

infancy, $5,000;

(c) Class A beneficiaries as defined in KRS 140.070, other than the surviving

spouse, of estates of decedents dying on or after July 1, 1995, shall be as

follows:

1. For decedents dying between July 1, 1995, and June 30, 1996, the

greater of the exemption established pursuant to paragraph (1)(b) of this

section or one-fourth (1/4) of each beneficiary's inheritable interest;

2. For decedents dying between July 1, 1996, and June 30, 1997, the

greater of the exemption established pursuant to paragraph (1)(b) of this

section or one-half (1/2) of each beneficiary's inheritable interest;

3. For decedents dying between July 1, 1997, and June 30, 1998, the

greater of the exemption established pursuant to paragraph (1)(b) of this

section or three-fourths (3/4) of each beneficiary's inheritable interest;

and

4. For each decedent dying after June 30, 1998, each beneficiary's total

inheritable interest;

(d) All persons of Class B, under KRS 140.070, $1,000; and

(e) All persons of Class C, under KRS 140.070, $500.

(2) If the decedent was not a resident of this state, the exemption shall be the same

proportion of the allowable exemption in the case of residents that the property

taxable by this state bears to the whole property transferred by the decedent.