United States Code

2011. Credit for State death taxes.

2012. Credit for gift tax.

2013. Credit for tax on prior transfers.

2014. Credit for foreign death taxes.

2015. Credit for death taxes on remainders. 2016. Recovery of taxes claimed as credit.

§ 2011. Credit for State death taxes. (a) In general.

The tax imposed by section 2001 shall be credited with the amount of any estate, inheritance, legacy, or succession taxes actually paid to any State or Territory or the District of Columbia, in respect of any property included in the gross estate (not including any such taxes paid with respect to the estate of a person other than the decedent).

If the taxable estate is: Over $640,000 but not over $840,000.

Over $840,000 but not over $1,040,000. Over $1,040,000 but not over $1,540,000. Over $1,540,000 but not over $2,040,000. Over $2,040,000 but not over $2,540,000. Over $2,540,000 but not over $3,040,000. Over $3,040,000 but not over $3,540,000. Over $3,540,000 but not over $4,040,000. Over $4,040,000 but not over $5,040,000.

Over $5,040,000 but not

over $6,040,000. Over $6,040,000 but not over $7,040,000.

Over $7,040,000 but not

over $8,040,000. Over $8,040,000 but not over $9,040,000.

Over $9,040,000 but not over $10,040,000. Over $10,040,000.

The maximum tax credit shall be: $18,000 plus 4.8% of the ex

cess over $640,000. $27,600 plus 5.6% of the excess over $840,000. $38,800 plus 6.4% of the excess over $1,040,000. $70,800 plus 7.2% of the excess over $1,540,000. $106,800 plus 8% of the excess over $2,040,000. $146,800 plus 8.8% of the excess over $2,540,000. $190,800 plus 9.6% of the excess over $3,040,000. $238,800 plus 10.4% of the

excess over $3,540,000. $290,800 plus 11.2% of the excess over $4,040,000. $402,800 plus 12% of the excess over $5,040,000. $522,800 plus 12.8% of the excess over $6,040,000. $650,800 plus 13.6% of the excess over $7,040,000. $786,800 plus 14.4% of the excess over $8,040,000. $930,800 plus 15.2% of the excess over $9,040,000. $1,082,800 plus 16% of the excess over $10,040,000.

The credit allowed by this section shall include only such taxes as were actually paid and credit therefor claimed within 4 years after the filing of the return required by section 6018, except that—

(1) If a petition for redetermination of a deficiency has been filed with the Tax Court within the time prescribed in section 6213 (a), then within such 4-year period or before the expiration of 60 days after the decision of the Tax Court becomes final.

(3) If a claim for refund or credit of an overpayment of tax imposed by this chapter has been filed within the time prescribed in section 6511, then within such 4-year period or before the expiration of 60 days from the date of mailing by certified mail or registered mail by the Secretary or his delegate to the taxpayer of a notice of the disallowance of any part of such claim, or before the expiration of 60 days after a decision by any court of competent jurisdiction becomes final with respect to a timely suit instituted upon such claim, whichever is later.

Refund based on the credit may (despite the provisions of sections 6511 and 6512) be made if claim therefor is filed within the period above provided. Any such refund shall be made without interest.

(d) Basic estate tax.

The basic estate tax and the estate tax imposed by the Revenue Act of 1926 shall be 125 percent of the amount determined to be the maximum credit provided by subsection (b). The additional estate tax shall be the difference between the tax imposed by section 2001 or 2101 and the basic estate tax.

(e) Limitation in cases involving deduction under section 2053 (d).

In any case where a deduction is allowed under section 2053 (d) for an estate, succession, legacy, or inheritance tax imposed by a State or Territory or the District of Columbia upon a transfer for public, charitable, or religious uses described in section 2055 or 2106(a)(2), the allowance of the credit under this section shall be subject to the following conditions and limitations:

(1) The taxes described in subsection (a) shall not include any estate, succession, legacy, or inheritance tax for which such deduction is allowed under section 2053(d).

(2) The credit shall not exceed the lesser of(A) the amount stated in subsection (b) on a taxable estate determined by allowing such deduction authorized by section 2053 (d), or

(B) that proportion of the amount stated in subsection (b) on a taxable estate determined without regard to such deduction authorized by section 2053(d) as (i) the amount of the taxes described in subsection (a), as limited by the provisions of paragraph (1) of this subsection, bears to (ii) the amount of the taxes described in subsection (a) before applying the limitation contained in paragraph (1) of this subsection. (3) If the amount determined under subparagraph (B) of paragraph (2) is less than the amount determined under subparagraph (A) of that paragraph, then for purposes of subsection (d) such lesser amount shall be the maximum credit provided by subsection (b).

(Aug. 16, 1954, ch. 736, 68A Stat. 374; Feb. 20, 1956, ch. 63, § 3, 70 Stat. 24; Sept. 2, 1958, Pub. L. 85-866, title I, §§ 65 (a), 102(c) (1), 72 Stat. 1657, 1674; Aug. 21, 1959, Pub. L. 86-175, § 3, 73 Stat. 397.)

AMENDMENTS

1959 Subsec. (e). Pub. L. 86-175 substituted "imposed by a State or Territory or the District of Columbia upon a transfer" for "imposed upon a transfer" in the introduction, "such deduction" for "a deduction" in par. (1) and "such deduction" for "the deduction" in two instances in par. (2).

1958 Subsec. (a). Pub. L. 85-866, § 102(c) (1), eliminated "or any possession of the United States," following "District of Columbia,".

Subsec. (c) (3). Pub. L. 85-866, § 65(a), added subsec. (c) (3).

1956 Subsec. (e). Act Feb. 20, 1956, added subsec. (e). EFFECTIVE DATE OF 1959 AMENDMENT

Amendment of section by Pub. L. 86-175 applicable with respect to estates of decedents dying on or after July 1, 1955, see section 4 of Pub. L. 86-175, set out as a note under section 2053 of this title.

EFFECTIVE DATE OF 1958 AMENDMENT Section 102 (d) of Pub. L. 85-866 provided that: "The amendments made by this section (other than by subsection (b)) [which added section 2208 of this title and amended subsec. (a) of this section, and sections 2104 (f) and 2053 (d) (1) of this title] shall apply to the estates of decedents dying after the date of the enactment of this Act [Sept. 2, 1958). The amendment made by subsection (b) [to section 2501 (b) (c) of this title] shall apply to gifts made after the date of the enactment of this Act [Sept. 2, 1958]."

Section 65 (c) of Pub. L. 85-866 provided that: "The amendment made by subsection (a) [adding subsecs. (c) (3) of this section] shall apply with respect to estates of decedents dying after August 16, 1954. The amendment made by subsection (b) [adding subsecs. (c) (3)

of this section] shall apply with respect to estates of decedents dying after February 10, 1939, and on or before August 16, 1954."

EFFECTIVE DATE OF 1956 AMENDMENT

Amendment of this section by act Feb. 20, 1956, applicable to the estates of all decedents dying after Dec. 31, 1953, see section 4 of act Feb. 20, 1956, set out as a note under section 2053 of this title.

CROSS REFERENCES

Estates of nonresidents not citizens, see section 2102 of this title.

Limitations, see section 6511 of this title. Members of Armed Forces dying during induction period, see section 2201 of this title.

§ 2012. Credit for gift tax. (a) In general.

If a tax on a gift has been paid under chapter 12 (sec. 2501 and following), or under corresponding provisions of prior laws, and thereafter on the death of the donor any amount in respect of such gift is required to be included in the value of the gross estate of the decedent for purposes of this chapter, then there shall be credited against the tax imposed by section 2001 the amount of the tax paid on a gift under chapter 12, or under corresponding provisions of prior laws, with respect to so much of the property which constituted the gift as is included in the gross estate, except that the amount of such credit shall not exceed an amount which bears the same ratio to the tax imposed by section 2001 (after deducting from such tax the credit for State death taxes provided by section 2011) as the value (at the time of the gift or at the time of the death, whichever is lower) of so much of the property which constituted the gift as is included in the gross estate bears to the value of the entire gross estate reduced by the aggregate amount of the charitable and marital deductions allowed under sections 2055, 2056, and 2106 (a) (2).

(b) [Valuation reductions.] 1

In applying, with respect to any gift, the ratio stated in subsection (a), the value at the time of the gift or at the time of the death, referred to in such ratio, shall be reduced

(1) by such amount as will properly reflect the amount of such gift which was excluded in determining (for purposes of section 2503 (a)), or of corresponding provisions of prior laws, the total amount of gifts made during the year in which the gift was made;

(2) if a deduction with respect to such gift is allowed under section 2056 (a) (relating to marital deduction)-then by an amount which bears the same ratio to such value (reduced as provided in paragraph (1) of this subsection) as the aggregate amount of the marital deductions allowed under section 2056 (a) bears to the aggregate amount of such marital deductions computed without regard to subsection (c) thereof; and

(3) if a deduction with respect to such gift is allowed under sections 2055 or 2106 (a) (2) (relating to charitable deduction)-then by the amount of such value, reduced as provided in paragraph (1) of this subsection.

1 See footnote on following page.

Where the decedent was the donor of the gift but, under the provisions of section 2513, or corresponding provisions of prior laws, the gift was considered as made one-half by his spouse—

(1) the term "the amount of the tax paid on a gift under chapter 12", as used in subsection (a), includes the amounts paid with respect to each half of such gift, the amount paid with respect to each being computed in the manner provided in subsection (d); and

(2) in applying, with respect to such gift, the ratio stated in subsection (a), the value at the time of the gift or at the time of the death, referred to in such ratio, includes such value with respect to each half of such gift, each such value being reduced as provided in paragraph (1) of subsection (b).

(d) [Amount of gift tax.]1

(1) For purposes of subsection (a), the amount of tax paid on a gift under chapter 12, or under corresponding provisions of prior laws, with respect to any gift shall be an amount which bears the same ratio to the total tax paid for the year in which the gift was made as the amount of such gift bears to the total amount of taxable gifts (computed without deduction of the specific exemption) for such year.

(2) For purposes of paragraph (1), the "amount of such gift" shall be the amount inIcluded with respect to such gift in determining (for the purposes of section 2503 (a), or of corresponding provisions of prior laws) the total amount of gifts made during such year, reduced by the amount of any deduction allowed with respect to such gift under section 2522, or under corresponding provisions of prior laws (relating to charitable deduction), or under section 2523 (relating to marital deduction).

(Aug. 16, 1954, ch. 736, 68A Stat. 375.)

CROSS REFERENCES

Estates of nonresidents not citizens, see section 2102 of this title.

§ 2013. Credit for tax on prior transfers.

(a) General rule.

The tax imposed by section 2001 shall be credited with all or a part of the amount of the Federal estate tax paid with respect to the transfer of property (including property passing as a result of the exercise or non-exercise of a power of appointment) to the decedent by or from a person (herein designated as a "transferor") who died within 10 years before, or within 2 years after, the decedent's death. If the transferor died within 2 years of the death of the decedent, the credit shall be the amount determined under subsections (b) and (c). If the transferor predeceased the decedent by more than 2 years, the credit shall be the following percentage of the amount so determined

(1) 80 percent, if within the third or fourth years preceding the decedent's death;

(2) 60 percent, if within the fifth or sixth years preceding the decedent's death;

1 Subsection catchline supplied by Editor.

(3) 40 percent, if within the seventh or eighth years preceding the decedent's death; and

(4) 20 percent, if within the ninth or tenth years preceding the decedent's death. (b) Computation of credit.

Subject to the limitation prescribed in subsection (c), the credit provided by this section shall be an amount which bears the same ratio to the estate tax paid (adjusted as indicated hereinafter) with respect to the estate of the transferor as the value of the property transferred bears to the taxable estate of the transferor (determined for purposes of the estate tax) decreased by any death taxes paid with respect to such estate and increased by the exemption provided for by section 2052 or section 2106 (a) (3), or the corresponding provisions of prior laws, in determining the taxable estate of the transferor for purposes of the estate tax. For purposes of the preceding sentence, the estate tax paid shall be the Federal estate tax paid increased by any credits allowed against such estate tax under section 2012, or corresponding provisions of prior laws, on account of gift tax, and for any credits allowed against such estate tax under this section on account of prior transfers where the transferor acquired property from a person who died within 10 years before the death of the decedent.

(1) In general.

The credit provided in this section shall not exceed the amount by which—

(A) the estate tax imposed by section 2001 or section 2101 (after deducting the credits for State death taxes, gift tax, and foreign death taxes provided for in sections 2011, 2012, and 2014) computed without regard to this section, exceeds

(B) such tax computed by excluding from the decedent's gross estate the value of such property transferred and, if applicable, by making the adjustment hereinafter indicated. If any deduction is otherwise allowable under section 2055 or section 2106 (a) (2) (relating to charitable deduction) then, for the purpose of the computation indicated in subparagraph (B), the amount of such deduction shall be reduced by that part of such deduction which the value of such property transferred bears to the decedent's entire gross estate reduced by the deductions allowed under sections 2053 and 2054, or section 2106 (a) (1) (relating to deduction for expenses, losses, etc.). For purposes of this section, the value of such property transferred shall be the value as provided for in subsection (d) of this section. (2) Two or more transferors.

If the credit provided in this section relates to property received from 2 or more transferors, the limitation provided in paragraph (1) of this subsection shall be computed by aggregating the value of the property so transferred to the decedent. The aggregate limitation so determined shall be apportioned in accordance with the value of the property transferred to the decedent by each transferor.

(d) Valuation of property transferred.

The value of property transferred to the decedent shall be the value used for the purpose of determining the Federal estate tax liability of the estate of the transferor but

(1) there shall be taken into acccount the effect of the tax imposed by section 2001 or 2101, or any estate, succession, legacy, or inheritance tax, on the net value to the decedent of such property;

(2) where such property is encumbered in any manner, or where the decedent incurs any obligation imposed by the transferor with respect to such property, such encumbrance or obligation shall be taken into account in the same manner as if the amount of a gift to the decedent of such property was being determined; and

(3) if the decedent was the spouse of the transferor at the time of the transferor's death, the net value of the property transferred to the decedent shall be reduced by the amount allowed under section 2056 (relating to marital deductions), or the corresponding provision of prior law, as a deduction from the gross estate of the transferor.

(e) Property defined.

For purposes of this section, the term "property" includes any beneficial interest in property, including a general power of appointment (as defined in section 2041). (Aug. 16, 1954, ch. 736, 68A Stat. 377.)

CROSS REFERENCES

Estates of nonresidents not citizens, see section 2102 of this title.

§2014. Credit for foreign death taxes.

(a) In general.

The tax imposed by section 2001 shall be credited with the amount of any estate, inheritance, legacy, or succession taxes actually paid to any foreign country in respect of any property situated within such foreign country and included in the gross estate (not including any such taxes paid with respect to the estate of a person other than the decedent). If the decedent at the time of his death was not a citizen of the United States, credit shall not be allowed under this section unless the foreign country of which such decedent was a citizen or subject, in imposing such taxes, allows a similar credit in the case of a citizen of the United States resident in such country. The determination of the country within which property is situated shall be made in accordance with the rules applicable under subchapter B (sec. 2101 and following) in determining whether property is situated within or without the United States.

(b) Limitations on credit.

The credit provided in this section with respect to such taxes paid to any foreign country

(1) shall not, with respect to any such tax, exceed an amount which bears the same ratio to the amount of such tax actually paid to such foreign country as the value of property which is

(A) situated within such foreign country, (B) subjected to such tax, and

(2) shall not, with respect to all such taxes, exceed an amount which bears the same ratio to the tax imposed by section 2001 (after deducting from such tax the credits provided by sections 2011 and 2012) as the value of property which is—

(A) situated within such foreign country, (B) subjected to the taxes of such foreign country, and

(C) included in the gross estate bears to the value of the entire gross estate reduced by the aggregate amount of the deductions allowed under sections 2055 and 2056.

(1) The values referred to in the ratio stated in subsection (b) (1) are the values determined for purposes of the tax imposed by such foreign country.

(2) The values referred to in the ratio stated in subsection (b) (2) are the values determined under this chapter; but, in applying such ratio, the value of any property described in subparagraphs (A), (B), and (C) thereof shall be reduced by such amount as will properly reflect, in accordance with regulations prescribed by the Secretary or his delegate, the deductions allowed in respect of such property under sections 2055 and 2056 (relating to charitable and marital deductions).

(d) Proof of credit.

The credit provided in this section shall be allowed only if the taxpayer establishes to the satisfaction of the Secretary or his delegate

(1) the amount of taxes actually paid to the foreign country,

(2) the amount and date of each payment thereof,

(3) the description and value of the property in respect of which such taxes are imposed, and (4) all other information necessary for the verification and computation of the credit.

(e) Period of limitation.

The credit provided in this section shall be allowed only for such taxes as were actually paid and credit therefor claimed within 4 years after the filing of the return required by section 6018, except that

(2) If, under section 6161, an extension of time has been granted for payment of the tax shown on the return, or of a deficiency, then within such 4-year period or before the date of the expiration of the period of the extension. Refund based on such credit may (despite the provisions of sections 6511 and 6512) be made if claim therefor is filed within the period above provided. Any such refund shall be made without interest.

(f) Additional limitation in cases involving a deduction under section 2053(d).

In any case where a deduction is allowed under section 2053 (d) for an estate, succession, legacy, or inheritance tax imposed by and actually paid to any foreign country upon a transfer by the decedent for public, charitable, or religious uses described in section 2055, the property described in subparagraphs (A), (B), and (C) of paragraphs (1) and (2) of subsection (b) of this section shall not include any property in respect of which such deduction is allowed under section 2053(d).

(g) Possession of United States deemed a foreign country.

For purposes of the credits authorized by this section, each possession of the United States shall be deemed to be a foreign country. (Aug. 16, 1954, ch. 736, 68A Stat. 378; Sept. 2, 1958, Pub. L. 85-866, title I, § 102(c) (2), 72 Stat. 1674; Aug. 21, 1959, Pub. L. 86-175, § 2, 73 Stat. 397.)

AMENDMENTS

1959 Subsec. (1). Pub. L. 86-175 added subsec. (f) and redesignated former subsec. (f) as (g).

Subsec. (g). Pub. L. 86-175 redesignated former subsec. (f) as (g).

1958 Subsec. (f). Pub. L. 85-866 added subsec. (f). EFFECTIVE Date of 1959 AMENDMENT

EFFECTIVE DATE of 1958 AMENDMENT

Subsec. (f) applicable to estates of decedents dying after Sept. 2, 1958, see section 102 (d) of Pub. L. 85-866, set out as a note under section 2011 of this title.

CROSS REFERENCES

Limitation on credit or refund, see section 6511 of this

title.

§ 2015. Credit for death taxes on remainders.

Where an election is made under section 6163 (a) to postpone payment of the tax imposed by section 2001, or 2101, such part of any estate, inheritance, legacy, or succession taxes allowable as a credit under section 2011 or 2014, as is attributable to a reversionary or remainder interest may be allowed as a credit against the tax attributable to such interest, subject to the limitations on the amount of the credit contained in such sections, if such part is paid, and credit therefor claimed, at any time before the expiration of the time for payment of the tax imposed by section 2001 or 2101 as postponed and extended under section 6163. (Aug. 16, 1954, ch. 736, 68A Stat. 379; Sept. 2, 1958, Pub. L. 85-866, title I, § 66(a) (1), 72 Stat. 1657.)

AMENDMENTS

1958-Pub. L. 85-866 substituted "the time for payment of the tax imposed by section 2001 or 2101 as postponed and extended under section 6163" for "60 days after the termination of the precedent interest or interests in the property".

EFFECTIVE DATE OF 1958 AMENDMENT

Section 66 (a) (3) of Pub. L. 85-866 provided that: "The amendments made by paragraphs (1) and (2) [amending this section and section 927 of I. R. C. 1939] shall apply in the case of any reversionary or remainder interest in property only if the precedent interest or interests in the property did not terminate before the beginning of the 60-day period which ends on the date of the enactment of this Act [Sept. 2, 1958]."

CROSS REFERENCES Limitation on credit or refund, see section 6511 of this

title.

§ 2016. Recovery of taxes claimed as credit.

If any tax claimed as a credit under section 2011 or 2014 is recovered from any foreign country, any State, any Territory or possession of the United States, or the District of Columbia, the executor, or any other person or persons recovering such amount, shall give notice of such recovery to the Secretary or his delegate at such time and in such manner as may be required by regulations prescribed by him, and the Secretary or his delegate shall (despite the provisions of section 6501) redetermine the amount of the tax under this chapter and the amount, if any, of the tax due on such redetermination, shall be paid by the executor or such person or persons, as the case may be, on notice and demand. No interest shall be assessed or collected on any amount of tax due on any redetermination by the Secretary or his delegate, resulting from a refund to the executor of tax claimed as a credit under section 2014, for any period before the receipt of such refund, except to the extent interest was paid by the foreign country on such refund. (Aug. 16, 1954, ch. 736, 68A Stat. 380.)

2039. Annuities.

2040. Joint interests.

2041. Powers of appointment.

2042. Proceeds of life insurance.

2043. Transfers for insufficient consideration. 2044. Prior interests.

§ 2031. Definition of gross estate. (a) General.

The value of the gross estate of the decedent shall be determined by including to the extent provided for in this part, the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated.

(b) Valuation of unlisted stock and securities.

In the case of stock and securities of a corporation the value of which, by reason of their not being listed on an exchange and by reason of the absence of sales thereof, cannot be determined with reference to bid and asked prices or with reference to sales prices, the value thereof shall be determined by taking into consideration, in addition to all other factors, the value of stock or securities of corporations engaged in the same or a similar line of business which are listed on an exchange. (Aug. 16, 1954, ch. 736, 68A Stat. 380; Oct. 16, 1962, Pub. L. 87834, § 18(a) (1), 76 Stat. 1052.)

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United States Code, Volume 6