§2014 Credit for Foreign Death Taxes

Summary

Lets the U.S. estate tax be reduced by any estate, inheritance, legacy, or succession taxes actually paid to another country on property that is located in that country and is part of the decedent’s estate. Which country a piece of property is located in is decided the same way other U.S. rules decide whether property is inside or outside the United States. The credit cannot be bigger than the portion of the foreign tax that applies to the property in that country. It also cannot be bigger than the part of the U.S. estate tax (after certain other estate tax credits and after allowed charitable and marital deductions) that matches the value of the property in that foreign country compared to the rest of the estate. For the first limit, use the values the foreign country used. For the second, use the U.S. estate values but reduce them to reflect allowed charitable and marital deductions. If a foreign tax was deducted because the transfer was to a public, charitable, or religious use, that property is not counted for the credit. U.S. territories count as foreign countries for this rule. You must prove the foreign tax paid, the dates and amounts, and describe and value the property. The credit is allowed only for taxes actually paid and claimed within 4 years after the required return is filed, except that timely Tax Court petitions or payment extensions can extend that deadline (including up to 60 days after a final Tax Court decision). Refunds from this credit can be made if claimed in that period, but without interest. The President can block the credit for people of a foreign country if that country refuses to give U.S. citizens the same kind of credit.