Title 26, Internal Revenue CodeRelease 119-110
§2013 Credit for Tax on Prior Transfers
Title 26 › Subtitle B — Estate and Gift Taxes › CHAPTER 11 — ESTATE TAX › Subchapter A — Estates of Citizens or Residents › PART II — CREDITS AGAINST TAX › § 2013
Summary
Gives a credit against the federal estate tax when a person inherited property from someone who died not long before or shortly after them. If the earlier person died within 2 years of the decedent, the full credit is allowed under the calculation rules. If the earlier person died more than 2 years before but within 10 years, the credit is reduced by a sliding scale: 80% if 3–4 years before, 60% if 5–6 years before, 40% if 7–8 years before, and 20% if 9–10 years before. The credit is the share of the transferor’s estate tax that matches the share of the transferor’s estate made up by the property passed to the decedent, with some adjustments and a limit so it cannot be larger than the tax savings from removing that property from the decedent’s estate. If more than one person transferred property, their values are added and the credit is split by each person’s share. Value means the amount used for the transferor’s estate tax, but reduced for taxes that lower the property’s net value, any debts or obligations on the property, and a marital deduction if the decedent was the transferor’s spouse. Property includes beneficial interests like a general power of appointment. A special extra tax under section 2032A, if imposed within two years, is treated as estate tax for these rules and the property is valued as if that special rule did not apply.
Full Legal Text
Title 26, §2013
Internal Revenue Code, Source: USLM XML via OLRC
(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 section 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 section 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)
(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.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Amendments
2001—Subsec. (c)(1)(A). Pub. L. 107–16 struck out “2011,” after “section 2010,”. 1997—Subsec. (g). Pub. L. 105–34 struck out heading and text of subsec. (g). Prior to amendment, text read as follows: “For purposes of this section, the estate tax paid shall not include any portion of such tax attributable to section 4980A(d).” 1988—Subsec. (g). Pub. L. 100–647 added subsec. (g). 1986—Subsec. (g). Pub. L. 99–514 struck out subsec. (g) which provided for treatment of tax imposed on certain generation-skipping transfers. 1976—Subsec. (b). Pub. L. 94–455, § 2001(c)(1)(C)(i), struck out “and increased by the exemption provided for by section 2052 or section 2106(a)(3), or the corresponding provisions of prior laws, in determining the taxable estate of the transferor for purposes of the estate tax” after “death taxes paid with respect to such estate”. Subsec. (c)(1)(A). Pub. L. 94–455, § 2001(c)(1)(C)(ii), substituted “credits provided for in section 2010, 2011, 2012, and 2014) computed” for “credits for State death taxes, gift tax, and foreign death taxes provided for in section 2011, 2012, and 2014) computed”. Subsec. (d)(3). Pub. L. 94–455, § 1902(a)(2), struck out “, or the corresponding provision of prior law,” after “marital deductions)”. Subsec. (f). Pub. L. 94–455, § 2003(c), added subsec. (f). Subsec. (g). Pub. L. 94–455, § 2006(b)(2), added subsec. (g).
Statutory Notes and Related Subsidiaries
Effective Date
of 2001 AmendmentAmendment by Pub. L. 107–16 applicable to estates of decedents dying, and generation-skipping transfers, after Dec. 31, 2004, see section 532(d) of Pub. L. 107–16, set out as a note under section 2012 of this title.
Effective Date
of 1997 AmendmentAmendment by Pub. L. 105–34 applicable to estates of decedents dying after Dec. 31, 1996, see section 1073(c) of Pub. L. 105–34, set out as an
Effective Date
of Repeal note under section 4980A of this title.
Effective Date
of 1988 AmendmentAmendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Effective Date
of 1986 AmendmentAmendment by Pub. L. 99–514 applicable to generation-skipping transfers (within the meaning of section 2611 of this title) made after Oct. 22, 1986, except as otherwise provided, see section 1433 of Pub. L. 99–514, set out as an
Effective Date
note under section 2601 of this title.
Effective Date
of 1976 AmendmentAmendment by section 1902(a)(2) of Pub. L. 94–455 applicable to estates of decedents dying after Oct. 4, 1976, see section 1902(c)(1) of Pub. L. 94–455, set out as a note under section 2012 of this title.
Reference
Citations & Metadata
Citation
26 U.S.C. § 2013
Title 26, Internal Revenue Code
Last Updated
Sep 22, 2026
Release point: 119-110