Internal Revenue Code:Sec. 2013. Credit for tax on prior transfers

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Contents


Location in Internal Revenue Code


     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle B - Estate and Gift Taxes
       CHAPTER 11 - ESTATE TAX
        Subchapter A - Estates of Citizens or Residents
         PART II - CREDITS AGAINST TAX
       

Statute

    Sec. 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;
        (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.  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.
    (c) Limitation on credit
      (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 provided for in sections 2010,
        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 account 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), 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).
    (f) Treatment of additional tax imposed under section 2032A
      If section 2032A applies to any property included in the gross
    estate of the transferor and an additional tax is imposed with
    respect to such property under section 2032A(c) before the date
    which is 2 years after the date of the decedent's death, for
    purposes of this section -
        (1) the additional tax imposed by section 2032A(c) shall be
      treated as a Federal estate tax payable with respect to the
      estate of the transferor; and
        (2) the value of such property and the amount of the taxable
      estate of the transferor shall be determined as if section 2032A
      did not apply with respect to such property.
 

Sources

    (Aug. 16, 1954, ch. 736, 68A Stat. 377; Pub. L. 94-455, title XIX,
    Sec. 1902(a)(2), title XX, Sec. 2001(c)(1)(C), 2003(c), 2006(b)(2),
    Oct. 4, 1976, 90 Stat. 1804, 1850, 1862, 1888; Pub. L. 99-514,
    title XIV, Sec. 1432(c)(2), Oct. 22, 1986, 100 Stat. 2730; Pub. L.
    100-647, title I, Sec. 1011A(g)(7), Nov. 10, 1988, 102 Stat. 3481;
    Pub. L. 105-34, title X, Sec. 1073(b)(2), Aug. 5, 1997, 111 Stat.
    948; Pub. L. 107-16, title V, Sec. 532(c)(2), June 7, 2001, 115
    Stat. 74.)
 

Amendment of Section

                     AMENDMENT OF SUBSECTION (C)(1)(A)
        Pub. L. 107-16, title V, Sec. 532(c)(2), (d), title IX, Sec.
      901, June 7, 2001, 115 Stat. 74, 75, 150, provided that,
      applicable to estates of decedents dying, and generation-skipping
      transfers, after Dec. 31, 2004, subsection (c)(1)(A) of this
      section is temporarily amended by striking out ''2011,'' after
      ''sections 2010,''. See Effective and Termination Dates of 2001
      Amendment note below.
 

Miscellaneous

                                 AMENDMENTS
      1997 - Subsec. (g). Pub. L. 105-34 struck out heading and text of
    subsec. (g). Prior to amendment, text read as follows: ''For
    purposes of this section, the estate tax paid shall not include any
    portion of such tax attributable to section 4980A(d).''
      1988 - Subsec. (g). Pub. L. 100-647 added subsec. (g).
      1986 - Subsec. (g). Pub. L. 99-514 struck out subsec. (g) which
    provided for treatment of tax imposed on certain
    generation-skipping transfers.
      1976 - Subsec. (b). Pub. L. 94-455, Sec. 2001(c)(1)(C)(i), struck
    out ''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'' after ''death taxes paid with respect
    to such estate''.
      Subsec. (c)(1)(A). Pub. L. 94-455, Sec. 2001(c)(1)(C)(ii),
    substituted ''credits provided for in sections 2010, 2011, 2012,
    and 2014) computed'' for ''credits for State death taxes, gift tax,
    and foreign death taxes provided for in sections 2011, 2012, and
    2014) computed''.
      Subsec. (d)(3). Pub. L. 94-455, Sec. 1902(a)(2), struck out '',
    or the corresponding provision of prior law,'' after ''marital
    deductions)''.
      Subsec. (f). Pub. L. 94-455, Sec. 2003(c), added subsec. (f).
      Subsec. (g). Pub. L. 94-455, Sec. 2006(b)(2), added subsec. (g).
             EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
      Amendment by Pub. L. 107-16 applicable to estates of decedents
    dying, and generation-skipping transfers, after Dec. 31, 2004, see
    section 532(d) of Pub. L. 107-16, set out as a note under section
    2011 of this title.
      Amendment by Pub. L. 107-16 inapplicable to estates of decedents
    dying, gifts made, or generation skipping transfers, after Dec. 31,
    2010, and the Internal Revenue Code of 1986 to be applied and
    administered to such estates, gifts, and transfers as if such
    amendment had never been enacted, see section 901 of Pub. L.
    107-16, set out as a note under section 1 of this title.
                      EFFECTIVE DATE OF 1997 AMENDMENT
      Amendment by Pub. L. 105-34 applicable to estates of decedents
    dying after Dec. 31, 1996, see section 1073(c) of Pub. L. 105-34,
    set out as an Effective Date of Repeal note under section 4980A of
    this title.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Amendment by Pub. L. 100-647 effective, except as otherwise
    provided, as if included in the provision of the Tax Reform Act of
    1986, Pub. L. 99-514, to which such amendment relates, see section
    1019(a) of Pub. L. 100-647, set out as a note under section 1 of
    this title.
                      EFFECTIVE DATE OF 1986 AMENDMENT
      Amendment by Pub. L. 99-514 applicable to generation-skipping
    transfers (within the meaning of section 2611 of this title) made
    after Oct. 22, 1986, except as otherwise provided, see section 1433
    of Pub. L. 99-514, set out as an Effective Date note under section
    2601 of this title.
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 2056, 2102, 2107 of this
    title.
 

Personal tools