§2014 Credit for Foreign Death Taxes

Summary

You can reduce the U.S. estate tax by the amount of estate-type taxes you actually paid to a foreign country on property that was located in that country and counted in the U.S. gross estate. The credit for a specific foreign tax is limited so it cannot be larger than the share of that foreign tax that matches the value of the property actually in that foreign country. The total credit for all foreign taxes is also limited so it cannot be larger than the share of the U.S. estate tax (after other allowed credits) that matches the value of the foreign-taxed property. For the first limit, use the values the foreign country used. For the second limit, use U.S. values, reduced to reflect any charitable or marital deductions allowed under U.S. law. You must prove the foreign tax was paid by showing the amounts, dates, and a description and value of the property. The credit is allowed only for taxes actually paid and claimed within 4 years after filing the required return, except if you timely file a Tax Court petition (then you have until the 4-year period ends or within 60 days after the Tax Court decision is final) or if you were granted an extension to pay (then you have until the 4-year period ends or the extension ends). Property that received a special U.S. deduction for foreign taxes paid on charitable transfers is not counted when figuring the credit. U.S. possessions are treated as foreign countries. The President may refuse the credit for a country that does not give similar credits to U.S. citizens living there and that will not agree to do so when asked.