Subtitle B-Estate and Gift Taxes

CHAPTER 11-ESTATE TAX

SUBCHAPTER A. Estates of citizens or residents.
SUBCHAPTER B. Estates of nonresidents not citizens.
SUBCHAPTER C. Miscellaneous.

Subchapter A-Estates of Citizens or Residents

PART I-TAX IMPOSED

Sec. 2001. Rate of tax.

Sec. 2002. Liability for payment

A tax computed in accordance with the following table is hereby imposed on the transfer of the taxable estate, determined as provided in section 2051, of every decedent, citizen or resident of the United States dying after the date of enactment of this title:

If the taxable estate is:
Over $1,500,000 but not over $2,000,000__
Over $2,000,000 but not over $2,500,000__
Over $2,500,000 but not over $3,000,000__
Over $3,000,000 but not over $3,500,000--

Over $3,500,000 but not over $4,000,000..

Over $4,000,000 but not over $5,000,000..

Over $5,000,000 but not over $6,000,000..

Over $6,000,000 but not over $7,000,000__

Over $7,000,000 but not over $8,000,000...

Over $8,000,000 but not over $10,000,000.

Over $10,000,000 ---

SEC. 2002. LIABILITY FOR PAYMENT.

The tax shall be:

$528,200, plus 45% of excess over $1,500,000.

$753,200, plus 49% of excess over $2,000,000.

$998,200, plus 53% of excess over $2,500,000.

$1,263,200, plus 56% of excess over $3,000,000.

$1,543,200, plus 59% of excess over $3,500,000.

$1,838,200, plus 63% of excess over $4,000,000.

$2,468,200, plus 67% of excess over $5,000,000.

$3,138,200, plus 70% of excess over $6,000,000.

$3,838,200, plus 73% of excess over $7,000,000.

$4,568,200, plus 76% of excess over $8,000,000.

$6,088,200, plus 77% of excess over $10,000,000.

The tax imposed by this chapter shall be paid by the executor.

SEC. 2011.

PART II-CREDITS AGAINST TAX

Sec. 2011. Credit for State death taxes.

Sec. 2012. Credit for gift tax.

Sec. 2013. Credit for tax on prior transfers.
Sec. 2014. Credit for foreign death taxes.

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

(b) AMOUNT OF CREDIT.-The credit allowed by this section shall not exceed the appropriate amount stated in the following table:

If the taxable estate is:
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.

(c) PERIOD OF LIMITATIONS ON CREDIT.-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.

(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.

(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).

SEC. 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) 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.

(c) 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) (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 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 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).

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: