PART II—CREDITS AGAINST TAX
Editorial Notes
Amendments
2014—
2004—
2001—
1976—
§2010. Unified credit against estate tax
(a) General rule
A credit of the applicable credit amount shall be allowed to the estate of every decedent against the tax imposed by section 2001.
(b) Adjustment to credit for certain gifts made before 1977
The amount of the credit allowable under subsection (a) shall be reduced by an amount equal to 20 percent of the aggregate amount allowed as a specific exemption under section 2521 (as in effect before its repeal by the Tax Reform Act of 1976) with respect to gifts made by the decedent after September 8, 1976.
(c) Applicable credit amount
(1) In general
For purposes of this section, the applicable credit amount is the amount of the tentative tax which would be determined under section 2001(c) if the amount with respect to which such tentative tax is to be computed were equal to the applicable exclusion amount.
(2) Applicable exclusion amount
For purposes of this subsection, the applicable exclusion amount is the sum of—
(A) the basic exclusion amount, and
(B) in the case of a surviving spouse, the deceased spousal unused exclusion amount.
(3) Basic exclusion amount
(A) In general
For purposes of this subsection, the basic exclusion amount is $5,000,000.
(B) Inflation adjustment
In the case of any decedent dying in a calendar year after 2011, the dollar amount in subparagraph (A) shall be increased by an amount equal to—
(i) such dollar amount, multiplied by
(ii) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting "calendar year 2010" for "calendar year 2016" in subparagraph (A)(ii) thereof.
If any amount as adjusted under the preceding sentence is not a multiple of $10,000, such amount shall be rounded to the nearest multiple of $10,000.
(C) Increase in basic exclusion amount
In the case of estates of decedents dying or gifts made after December 31, 2017, and before January 1, 2026, subparagraph (A) shall be applied by substituting "$10,000,000" for "$5,000,000".
(4) Deceased spousal unused exclusion amount
For purposes of this subsection, with respect to a surviving spouse of a deceased spouse dying after December 31, 2010, the term "deceased spousal unused exclusion amount" means the lesser of—
(A) the basic exclusion amount, or
(B) the excess of—
(i) the applicable exclusion amount of the last such deceased spouse of such surviving spouse, over
(ii) the amount with respect to which the tentative tax is determined under section 2001(b)(1) on the estate of such deceased spouse.
(5) Special rules
(A) Election required
A deceased spousal unused exclusion amount may not be taken into account by a surviving spouse under paragraph (2) unless the executor of the estate of the deceased spouse files an estate tax return on which such amount is computed and makes an election on such return that such amount may be so taken into account. Such election, once made, shall be irrevocable. No election may be made under this subparagraph if such return is filed after the time prescribed by law (including extensions) for filing such return.
(B) Examination of prior returns after expiration of period of limitations with respect to deceased spousal unused exclusion amount
Notwithstanding any period of limitation in section 6501, after the time has expired under section 6501 within which a tax may be assessed under
(6) Regulations
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this subsection.
(d) Limitation based on amount of tax
The amount of the credit allowed by subsection (a) shall not exceed the amount of the tax imposed by section 2001.
(Added
Inflation Adjusted Items for Certain Years
For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under
Editorial Notes
References in Text
The Tax Reform Act of 1976, referred to in subsec. (b), is
Amendments
2017—Subsec. (c)(3)(B)(ii).
Subsec. (c)(3)(C).
2013—Subsec. (c)(4)(B)(i).
2010—Subsec. (c).
Subsec. (c)(2) to (6).
"(A)
"(B)
"(i) such dollar amount, multiplied by
"(ii) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting 'calendar year 2010' for 'calendar year 1992' in subparagraph (B) thereof.
If any amount as adjusted under the preceding sentence is not a multiple of $10,000, such amount shall be rounded to the nearest multiple of $10,000."
2001—Subsec. (c).
1997—Subsec. (a).
Subsecs. (c), (d).
1990—Subsecs. (b) to (d).
1981—Subsec. (a).
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2017 Amendment
Amendment by section 11002(d)(1)(CC) of
Amendment by section 11061(a) of
Effective Date of 2013 Amendment
Amendment by
Effective Date of 2010 Amendment
Amendment by section 302(a)(1) of
"(1)
"(2)
Effective Date of 2001 Amendment
"(1)
"(2)
"(3)
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1981 Amendment
Savings Provision
For provisions that nothing in amendment by
[§2011. Repealed. Pub. L. 113–295, div. A, title II, §221(a)(95)(A)(i), Dec. 19, 2014, 128 Stat. 4051 ]
Section, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of
§2012. Credit for gift tax
(a) In general
If a tax on a gift has been paid under
(b) Valuation reductions
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 calendar quarter (or calendar year if the gift was made before January 1, 1971) 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 the amount of such value, reduced as provided in paragraph (1); 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.
(c) Where gift considered made one-half by spouse
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
(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) Computation of amount of gift tax paid
(1) Amount of tax
For purposes of subsection (a), the amount of tax paid on a gift under
(2) Amount of gift
For purposes of paragraph (1), the "amount of such gift" shall be the amount included 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 quarter or 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).
(e) Section inapplicable to gifts made after December 31, 1976
No credit shall be allowed under this section with respect to the amount of any tax paid under
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2001—Subsec. (a).
1981—Subsec. (b)(2).
1976—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
1970—Subsec. (b)(1).
Subsec. (d).
Subsec. (d)(1).
Statutory Notes and Related Subsidiaries
Effective Date of 2001 Amendment
Effective Date of 1981 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 2001(a)(3), (c)(1)(B) of
Effective Date of 1970 Amendment
Amendment by
§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, 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.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2001—Subsec. (c)(1)(A).
1997—Subsec. (g).
1988—Subsec. (g).
1986—Subsec. (g).
1976—Subsec. (b).
Subsec. (c)(1)(A).
Subsec. (d)(3).
Subsec. (f).
Subsec. (g).
Statutory Notes and Related Subsidiaries
Effective Date of 2001 Amendment
Amendment by
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1902(a)(2) of
§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). 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
(C) included in the gross estate
bears to the value of all property 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 2010 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.
(c) Valuation of property
(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, 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—
(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—
(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.
(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.
(h) Similar credit required for certain alien residents
Whenever the President finds that—
(1) a foreign country, in imposing estate, inheritance, legacy, or succession taxes, does not allow to citizens of the United States resident in such foreign country at the time of death a credit similar to the credit allowed under subsection (a),
(2) such foreign country, when requested by the United States to do so has not acted to provide such a similar credit in the case of citizens of the United States resident in such foreign country at the time of death, and
(3) it is in the public interest to allow the credit under subsection (a) in the case of citizens or subjects of such foreign country only if it allows such a similar credit in the case of citizens of the United States resident in such foreign country at the time of death,
the President shall proclaim that, in the case of citizens or subjects of such foreign country dying while the proclamation remains in effect, the credit under subsection (a) shall be allowed only if such foreign country allows such a similar credit in the case of citizens of the United States resident in such foreign country at the time of death.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2001—Subsec. (b)(2).
1976—Subsec. (b)(2).
Subsecs. (c), (d).
1966—Subsec. (a).
Subsec. (h).
1959—Subsecs. (f), (g).
1958—Subsec. (f).
Statutory Notes and Related Subsidiaries
Effective Date of 2001 Amendment
Amendment by
Effective Date of 1966 Amendment
Amendment by
Effective Date of 1959 Amendment
Amendment by
Effective Date of 1958 Amendment
§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 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,
Editorial Notes
Amendments
2001—
1958—
Statutory Notes and Related Subsidiaries
Effective Date of 2001 Amendment
Amendment by
Effective Date of 1958 Amendment
§2016. Recovery of taxes claimed as credit
If any tax claimed as a credit under section 2014 is recovered from any foreign country, the executor, or any other person or persons recovering such amount, shall give notice of such recovery to the Secretary at such time and in such manner as may be required by regulations prescribed by him, and the Secretary 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 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,
Editorial Notes
Amendments
2002—
2001—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 2002 Amendment
Amendment by
Effective Date of 2001 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1902(a)(12)(C) of