§2013 Credit for tax on prior transfers

Summary

Gives an estate a credit against its federal estate tax for estate tax already paid on property the decedent got from someone who died within 10 years before, or within 2 years after, the decedent’s death. If that prior person died within 2 years of the decedent, the estate can claim the full credit as calculated below. If the prior person died more than 2 years before the decedent, the credit is reduced: 80% if they died in the 3rd or 4th year before, 60% in the 5th or 6th year, 40% in the 7th or 8th year, and 20% in the 9th or 10th year before the decedent. The credit is figured by comparing the estate tax paid on the prior person’s estate to the size of that person’s taxable estate, and then giving the decedent’s estate the matching share for the value of the property received, with some adjustments. The credit cannot be bigger than the tax saved if the transferred property were removed from the decedent’s estate. If the decedent got property from more than one prior person, the rule combines values and divides the credit by value. The value used is the same as used for the prior person’s estate tax, but it is lowered for any taxes, liens, obligations, or a marital deduction if the decedent was the transferor’s spouse. A beneficial interest or a general power of appointment counts as “property.” If a special additional tax under section 2032A applies and is charged within 2 years after the decedent’s death, that extra tax is treated as estate tax and values are figured as if section 2032A did not apply.