Colorado Inheritance Tax

Colorado inheritance tax and gift tax have been substituted by the Colorado estate tax for people who have died on or after 1st January 1980. The inheritance tax in Colorado was introduced in the year 1927.

The Colorado estate tax is not applicable to persons who have died on or after 1st January 2005. The calculation of estate tax in Colorado is done on the basis of the state death tax credit permissible on the federal return. Modifications can be made if there is involvement of one or more other states. However, this state death tax credit was taken out with effect from 31st December 2004 according to the amendments made to the Federal estate tax regulation systems.

Any further amendment to the Federal estate tax regulation system will ascertain whether any estate tax will be collected by the states in the U.S. in the coming years.

In Colorado, no gift tax is charged on property transfers by way of gifts, if the transfer took place after 1st January 1980.

For the purpose of filing estate tax return in Colorado, the form, which should be filed, is known as DR 1210 or Colorado Estate Tax Return. This is applicable when a Generation Skipping Transfer and United States Estate Tax Return have to be filed for a deceased person, who is a nonresident alien. The forms available for filing this type of tax returns are known as Federal Form 706 or Federal Form 706NA.

The Form DR 1210 has to be filed if the concerned person has died before 1st January 2005. For filing the federal return, all the necessary information is available from the Internal Revenue Services (IRS).

The state of Colorado has a Generation Skipping Transfer Tax, which has to be reported on the Colorado Estate Tax Return or DR 1210 Form. However, a small number of estates have to pay this tax.

The due date for filing the DR 1210 Form is the same as that for filing the Federal Form 706 or 706NA.