CONTENTS Page 1 Computation and rates of the Federal estate tax_ Credits against the gross estate tax... Estates of nonresidents not citizens.. Computation and rates of the Federal gift tax_ Credits against the Federal gift tax.... Survey and analysis of pending bills. Bills introduced in the House of Representatives during the 94th Comparison of major features of estate and gift tax legislation intro- duced in the House, 94th Congress.. Proposals to allow certain real property to be valued according to its existing use rather than its fair market value for estate tax purposes Comparison of the major features of estate and gift tax legislation introduced in the U.S. Senate during 1975- Revenue estimate for S. 2187--- Administration proposal on estate tax changes__ Estate and gift tax revision-1973 panel discussion__. Mr. Marvin K. Collie, Vinson, Elkins, Searls, Connally & Smith, Mr. James B. Lewis, Paul, Weiss, Rifkind, Wharton & Garrison, Mr. Bart A. Brown, Jr., Dinsmore, Shohl, Coates & Deupree, Cin- Mr. Richard Covey, Carter, Ledyard & Milburn, New York, N.Y__ Dr. Gerard M. Brannon, Georgetown University, Washington, D.C CONTENTS OVERVIEW OF THE PRESENT FEDERAL ESTATE AND GIFT TAX1 THE FEDERAL ESTATE TAX NATURE OF THE ESTATE TAX The Federal estate tax is imposed upon the transfer of a decedent's estate to his beneficiaries. Unlike an inheritance tax that is imposed upon each beneficiary of the estate and is based on the size of the inheritance and the relationship of the beneficiary to the decedent, the Federal estate tax is imposed on the entire estate, which is primarily liable for its payment. In general, the amount of any distributive share and the relationship of the beneficiaries to the decedent are not considered. However, the beneficiaries of the estate may be required to pay the tax if the estate does not pay it when due, but only to the extent of the value, at the time of the decedent's death, of the property acquired by them. ESTATES SUBJECT TO TAX A. Citizens or Residents of the United States The estate tax is applied to the entire estate of decedents who, at the time of death, were citizens or residents of the United States. The term "United States" includes only the 50 States and the District of Columbia, and does not include U.S. possessions or territories. If the decedent was a U.S. citizen, his residence at death is immaterial. A decedent was a resident of the United States if, at the time of his death, he was domiciled in the United States. A person acquires a domicile by living in a place, even for a brief period of time, with no definite present intention of leaving. B. Nonresident, Not Citizen The estate tax is applied only on the value of property situated within the United States if, at the time of death, the decedent was neither a citizen nor a resident of the United States. Similar treatment is accorded a U.S. citizen residing in a U.S. possession at the time of his death, if he acquired his U.S. citizenship solely by reason of being a citizen of a U.S. possession, or by birth or residence in a possession. C. Expatriates If at the time of death, the decedent was a nonresident not a citizen of the United States, but had lost his previous U.S. citizenship after March 9, 1965, and within 10 years of his death, the estate tax is applied only on property situated within the United States plus certain foreign corporation stock. 1 Abstracted from publication 448, "A Guide to Federal Estate and Gift Taxation," published by the Department of the Treasury, January 1975. |