UNOFFICIAL COPY 25 RS BR 1177
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AN ACT relating to inheritance tax exemptions. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
ď˘Section 1. KRS 140.080 is amended to read as follows: 3
(1) The following exemptions chargeable against the lowest bracket or brackets of 4
inheritable interests shall be free from any tax under the preceding provisions of 5
this chapter: 6
(a) Surviving spouse, total inheritable interest. Effective as to decedents dying 7
after August 1, 1985, notwithstanding anything in this chapter to the contrary, 8
if the decedent's personal representative (or trustee or transferee, absent a 9
personal representative) shall so elect, the spouse's inheritable interest shall 10
include the entire value of any trust or life estate which is in a form that 11
qualifies for the federal estate tax marital deductions under section 2056(b)(5) 12
or 2056(b)(7) of the Internal Revenue Code of 1954, as amended through 13
December 31, 1984, regardless of whether or not the federal estate tax marital 14
deduction is elected by the decedent's personal representative. To be valid, the 15
election referred to in the sentence immediately preceding must be made in 16
the form prescribed by the Department of Revenue and must be filed on or 17
before the due date of the tax return (plus extensions) or with the first tax 18
return filed, whichever last occurs; 19
(b) Class A beneficiaries as defined in KRS 140.070, other than the surviving 20
spouse, of estates of decedents dying prior to July 1, 1995, as follows: 21
1. Infant child by blood or adoption, $20,000; 22
2. Child by blood who has been declared mentally disabled by a court of 23
competent jurisdiction, $20,000; 24
3. Child adopted during infancy who has been declared mentally disabled 25
by a court of competent jurisdiction, $20,000; or a 26
4. Child adopted during adulthood who was reared by the decedent during 27 UNOFFICIAL COPY 25 RS BR 1177
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infancy and who has been declared mentally disabled by a court of 1
competent jurisdiction, $20,000; 2
5. Parent, $5,000; 3
6. Child by blood, $5,000; 4
7. Stepchild, $5,000; 5
8. Child adopted during infancy, $5,000; 6
9. Child adopted during adulthood who was reared by the decedent during 7
infancy, $5,000; or a 8
10. Grandchild who is the issue of a child by blood, the issue of a stepchild, 9
the issue of a child adopted during infancy or the issue of a child 10
adopted during adulthood who was reared by the decedent during 11
infancy, $5,000; 12
(c) Class A beneficiaries as defined in KRS 140.070, other than the surviving 13
spouse, of estates of decedents dying on or after July 1, 1995, shall be as 14
follows: 15
1. For decedents dying between July 1, 1995, and June 30, 1996, the 16
greater of the exemption established pursuant to paragraph (1)(b) of this 17
section or one-fourth (1/4) of each beneficiary's inheritable interest; 18
2. For decedents dying between July 1, 1996, and June 30, 1997, the 19
greater of the exemption established pursuant to paragraph (1)(b) of this 20
section or one-half (1/2) of each beneficiary's inheritable interest; 21
3. For decedents dying between July 1, 1997, and June 30, 1998, the 22
greater of the exemption established pursuant to paragraph (1)(b) of this 23
section or three-fourths (3/4) of each beneficiary's inheritable interest; 24
and 25
4. For each decedent dying after June 30, 1998, each beneficiary's total 26
inheritable interest; 27 UNOFFICIAL COPY 25 RS BR 1177
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(d) All persons of Class B, under KRS 140.070, as follows: 1
1. For decedents dying prior to January 1, 2026, $1,000; and 2
2. For decedents dying on or after January 1, 2026, each beneficiary's 3
total inheritable interest; and 4
(e) All persons of Class C, under KRS 140.070, $500. 5
(2) If the decedent was not a resident of this state, the exemption shall be the same 6
proportion of the allowable exemption in the case of residents that the property 7
taxable by this state bears to the whole property transferred by the decedent. 8