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House File 887 - IntroducedA Bill ForAn Act 1relating to exemptions to the state inheritance tax of
2estates, and including applicability provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 450.1, subsection 1, Code 2021, is
2amended by adding the following new paragraph:
3 NEW PARAGRAPH. 0b. “Family members” means brothers,
4sisters, stepbrothers, stepsisters, first or second cousins,
5first or second stepcousins, nieces, nephews, and their lineal
6descendants.
7 Sec. 2. Section 450.7, subsection 1, paragraph a, Code 2021,
8is amended to read as follows:
9a. The share of the estate passing to the surviving spouse,
10and parents, grandparents, great-grandparents, and other lineal
11ascendants, children including legally adopted children and
12biological children entitled to inherit under the laws of this
13state, stepchildren, and grandchildren, great-grandchildren,
14family members, and other lineal descendants is excluded from
15taxation under this chapter.
16 Sec. 3. Section 450.9, Code 2021, is amended to read as
17follows:
18450.9 Individual exemptions.
19In computing the tax on the net estate, the entire amount
20of property, interest in property, and income passing to the
21surviving spouse, lineal ascendants, lineal descendants, and
22 stepchildren and their lineal descendants, and family members
23 are exempt from tax. “Lineal descendants” includes descendants
24by adoption.
25 Sec. 4. Section 450.10, subsection 1, unnumbered paragraph
261, Code 2021, is amended to read as follows:
27When the property or any interest in property, or income from
28property, taxable under the provisions of this chapter, passes
29to the brother or sister, son-in-law, or daughter-in-law, the
30rate of tax imposed on the individual share so passing shall
31be as follows:
32 Sec. 5. Section 450.10, subsection 6, Code 2021, is amended
33to read as follows:
346. Property, interest in property, or income passing
35to the surviving spouse, and parents, grandparents,
-1-1great-grandparents, and other lineal ascendants, children
2including legally adopted children and biological children
3entitled to inherit under the laws of this state, stepchildren,
4and grandchildren, great-grandchildren, family members, and
5other lineal descendants, is not taxable under this section.
6 Sec. 6. APPLICABILITY. This Act applies to estates of
7decedents dying on or after July 1, 2021.
8EXPLANATION
9The inclusion of this explanation does not constitute agreement with
10the explanation’s substance by the members of the general assembly.
11This bill expands the state inheritance tax exemption by
12including estates passing to certain family members. The bill
13defines “family members”. Currently, estates passing to lineal
14ascendants and lineal descendants are exempt from the state
15inheritance tax.
16The bill applies to estates of decedents dying on or after
17July 1, 2021.
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2estates, and including applicability provisions.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 450.1, subsection 1, Code 2021, is
2amended by adding the following new paragraph:
3 NEW PARAGRAPH. 0b. “Family members” means brothers,
4sisters, stepbrothers, stepsisters, first or second cousins,
5first or second stepcousins, nieces, nephews, and their lineal
6descendants.
7 Sec. 2. Section 450.7, subsection 1, paragraph a, Code 2021,
8is amended to read as follows:
9a. The share of the estate passing to the surviving spouse,
10and parents, grandparents, great-grandparents, and other lineal
11ascendants, children including legally adopted children and
12biological children entitled to inherit under the laws of this
13state, stepchildren, and grandchildren, great-grandchildren,
14family members, and other lineal descendants is excluded from
15taxation under this chapter.
16 Sec. 3. Section 450.9, Code 2021, is amended to read as
17follows:
18450.9 Individual exemptions.
19In computing the tax on the net estate, the entire amount
20of property, interest in property, and income passing to the
21surviving spouse, lineal ascendants, lineal descendants, and
22 stepchildren and their lineal descendants, and family members
23 are exempt from tax. “Lineal descendants” includes descendants
24by adoption.
25 Sec. 4. Section 450.10, subsection 1, unnumbered paragraph
261, Code 2021, is amended to read as follows:
27When the property or any interest in property, or income from
28property, taxable under the provisions of this chapter, passes
29to the brother or sister, son-in-law, or daughter-in-law, the
30rate of tax imposed on the individual share so passing shall
31be as follows:
32 Sec. 5. Section 450.10, subsection 6, Code 2021, is amended
33to read as follows:
346. Property, interest in property, or income passing
35to the surviving spouse, and parents, grandparents,
-1-1great-grandparents, and other lineal ascendants, children
2including legally adopted children and biological children
3entitled to inherit under the laws of this state, stepchildren,
4and grandchildren, great-grandchildren, family members, and
5other lineal descendants, is not taxable under this section.
6 Sec. 6. APPLICABILITY. This Act applies to estates of
7decedents dying on or after July 1, 2021.
8EXPLANATION
9The inclusion of this explanation does not constitute agreement with
10the explanation’s substance by the members of the general assembly.
11This bill expands the state inheritance tax exemption by
12including estates passing to certain family members. The bill
13defines “family members”. Currently, estates passing to lineal
14ascendants and lineal descendants are exempt from the state
15inheritance tax.
16The bill applies to estates of decedents dying on or after
17July 1, 2021.
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