U.S Code last checked for updates: Nov 23, 2024
§ 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
(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, 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
(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
(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.
(Aug. 16, 1954, ch. 736, 68A Stat. 377; Pub. L. 94–455, title XIX, § 1902(a)(2), title XX, §§ 2001(c)(1)(C), 2003(c), 2006(b)(2), Oct. 4, 1976, 90 Stat. 1804, 1850, 1862, 1888; Pub. L. 99–514, title XIV, § 1432(c)(2), Oct. 22, 1986, 100 Stat. 2730; Pub. L. 100–647, title I, § 1011A(g)(7), Nov. 10, 1988, 102 Stat. 3481; Pub. L. 105–34, title X, § 1073(b)(2), Aug. 5, 1997, 111 Stat. 948; Pub. L. 107–16, title V, § 532(c)(2), June 7, 2001, 115 Stat. 74.)
cite as: 26 USC 2013