§2013 — Credit for tax on prior transfers
22 cases·8 followed·3 distinguished·3 overruled·8 cited—36% support
Statute Text — 26 U.S.C. §2013
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—
80 percent, if within the third or fourth years preceding the decedent’s death;
60 percent, if within the fifth or sixth years preceding the decedent’s death;
40 percent, if within the seventh or eighth years preceding the decedent’s death; and
20 percent, if within the ninth or tenth years preceding the decedent’s death.
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.
The credit provided in this section shall not exceed the amount by which—
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
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.
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.
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—
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;
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
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.
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).
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—
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
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.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §20.2013-1 Credit for tax on prior transfers
- Treas. Reg. §Treas. Reg. §20.2013-1(a) In general.
- Treas. Reg. §Treas. Reg. §20.2013-1(b) Limitations on credit.
- Treas. Reg. §Treas. Reg. §20.2013-1(c) Percentage reduction.
- Treas. Reg. §Treas. Reg. §20.2013-1(d) Examples.
- Treas. Reg. §Treas. Reg. §20.2013-2 “First limitation”
- Treas. Reg. §Treas. Reg. §20.2013-2(a) The amount of the Federal estate tax attributable to the transferred property in the transferor's estate is the “first limitation.
- Treas. Reg. §Treas. Reg. §20.2013-2(b) §20.2013-2(b)
- Treas. Reg. §Treas. Reg. §20.2013-2(c) §20.2013-2(c)
- Treas. Reg. §Treas. Reg. §20.2013-2(d) If the credit for tax on prior transfers relates to property received from two or more transferors, the provisions of this section are to be applied separately with respect to the property received from each transferor.
- Treas. Reg. §Treas. Reg. §20.2013-2(e) For illustrations of the application of this section, see examples (1) and (2) set forth in § 20.
- Treas. Reg. §Treas. Reg. §20.2013-3 “Second limitation”
- Treas. Reg. §Treas. Reg. §20.2013-3(a) The amount of the Federal estate tax attributable to the transferred property in the present decedent's estate is the “second limitation”.
- Treas. Reg. §Treas. Reg. §20.2013-3(b) If a charitable deduction is allowable to the estate of the present decedent under the provisions of section 2055 or section 2106 (a)(2) (for estates of nonresidents not citizens), for purposes of determining the tax described in paragraph (a)(2) of this section, the charitable deduction otherwise allowable is reduced by an amount, E, which bears the same ratio to F (the charitable deduction otherwise allowable) as G (the value of the transferred property (see § 20.
- Treas. Reg. §Treas. Reg. §20.2013-3(c) If the credit for tax on prior transfers relates to property received from two or more transferors, the property received from all transferors is aggregated in determining the limitation on credit under this section (the “second limitation”).
- Treas. Reg. §Treas. Reg. §20.2013-3(d) For illustrations of the application of this section, see examples (1) and (2) set forth in § 20.
- Treas. Reg. §Treas. Reg. §20.2013-4 Valuation of property transferred
- Treas. Reg. §Treas. Reg. §20.2013-4(a) For purposes of section 2013 and §§ 20.
- Treas. Reg. §Treas. Reg. §20.2013-4(b) §20.2013-4(b)
- Treas. Reg. §Treas. Reg. §20.2013-5 “Property” and “transfer” defined
- Treas. Reg. §Treas. Reg. §20.2013-5(a) For purposes of section 2013 and §§ 20.
- Treas. Reg. §Treas. Reg. §20.2013-5(b) In order to obtain the credit for tax on prior transfers, there must be a transfer of property described in paragraph (a) of this section by or from the transferor to the decedent.
- Treas. Reg. §Treas. Reg. §20.2013-5(c) §20.2013-5(c)
- Treas. Reg. §Treas. Reg. §20.2013-6 Examples
22 Citing Cases
In light of the facially manifest intent in section 7520(b) that exceptions to the statute’s application be permitted, we have no basis for concluding that Congress meant to overrule this administrative and judicial precedent.
Unlike sec . 2013, sec .
espect to the Estate of Kenneth R. Harrison in the amount of $16,457. After concessions, the sole issue for decision is whether the Estates of Judith U. Harrison and Kenneth R. Harrison are entitled to credits for tax on prior transfers pursuant to section 2013. Unless otherwise indicated, all section references are to sections of the Internal Revenue Code, and all Rule references are to the Tax Court Rules of Practice and Procedure. This case was submitted fully stipulated under Rule 122. The s
Le Caer’s estate may claim a credit under section 2013 for Federal estate tax paid on the transfer of property to Mrs.
Overpayment Status Petitioner's overpayment status is attributable to two functionally unrelated factors: respondent's uncontested allowance of credit for tax on prior transfers under section 2013, and our redetermination of the value of the shares in an amount which, although greater than the value reported on the estate tax return, is substantially less than the value determined in respondent's statutory notice.
Overpayment Status Petitioner’s overpayment status is attributable to two functionally unrelated factors: Respondent’s uncontested allowance of credit for tax on prior transfers under section 2013, and our redetermination of the value of the shares in an amount which, although greater than the value reported on the estate tax return, is substantially less than the value determined in respondent’s statutory notice.