What is the inheritance tax exemption for a decedent who was a nonresident of Tennessee?

If the decedent is a nonresident, the estate may take a percentage of the standard exemption that correlates to the percentage of the decedent’s property located in Tennessee as compared to the decedent’s entire estate (calculated as if the decedent had been a resident of Tennessee, which means that all property located outside Tennessee, will be excluded from this calculation).  There is a form on our website that will help you compute the exemption.

Example: A nonresident decedent has a gross estate of $900,000 in 2001.  Included in the estate are a Tennessee farm, valued at $200,000, and cattle on the farm, valued at $35,000. The estate also includes real property located outside Tennessee, valued at $150,000. The percentage of Tennessee property compared to the entire estate (calculated as if the decedent was a Tennessee resident) is 31.3%. The estate may claim an exemption of $211,500, which means it, will owe tax on $23,500.  

Inheritance Tax Exemption for Estates of Non-Residents

  1. Total gross value of all assets in all jurisdictions................................................................................... $ 900,000.00
  2. Fair market value of real and tangible property with a situs in states other than TN ............ $ 150,000.00
  3. Total gross estate if decedent were a Tennessee resident (line 1 minus line 2) ........................ $ 750,000.00
  4. Tennessee gross estate (See Inheritance Tax Return, page 3, Recapitulation line 10)............ $ 235,000.00
  5. Percentage of allocated exemption (line 4 divided by line 3) .......................................................... 0.31333
  6. Full Exemption based on date of death ................................................................................................. $ 675,000.00
    • (See Inheritance Tax Return, page 4, Inheritance Tax Computation)
  1. Allowable exemption for non-resident estate (multiply line 5 by line 6)...................................... $ 211,500.00
    •  (Enter the result on page 4, line 2)
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