§2014 — Title 26 Internal Revenue Code | U.S. Code

Summary

If an estate pays death taxes to a foreign country on property located there, those taxes can be credited against the U.S. estate tax, so the same property is not fully taxed twice. The credit is capped two ways: it cannot exceed the share of the foreign tax tied to property that is in that country and included in the U.S. gross estate, and it cannot exceed the share of the U.S. estate tax tied to that same property. U.S. possessions count as foreign countries for this credit. To claim it, the executor must prove the amount and dates of the foreign tax payments and describe the property taxed. The claim must generally be made within 4 years after the estate tax return is filed, with extra time allowed if a Tax Court case is pending or a payment extension was granted. The President can deny the credit to citizens of a country that refuses to give Americans living there a similar credit.

Title 26, §2014

Internal Revenue Code — Source: USLM XML via OLRC

(a)The tax imposed by section 2001 shall be credited with the amount of any estate, inheritance, legacy, or succession taxes actually paid to any foreign country in respect of any property situated within such foreign country and included in the gross estate (not including any such taxes paid with respect to the estate of a person other than the decedent). The determination of the country within which property is situated shall be made in accordance with the rules applicable under subchapter B (sec. 2101 and following) in determining whether property is situated within or without the United States.

(b)The credit provided in this section with respect to such taxes paid to any foreign country—

(1)shall not, with respect to any such tax, exceed an amount which bears the same ratio to the amount of such tax actually paid to such foreign country as the value of property which is—

(A)situated within such foreign country,

(B)subjected to such tax, and

(C)included in the gross estate

(2)shall not, with respect to all such taxes, exceed an amount which bears the same ratio to the tax imposed by section 2001 (after deducting from such tax the credits provided by section 2010 and 2012) as the value of property which is—

(A)situated within such foreign country,

(B)subjected to the taxes of such foreign country, and

(C)included in the gross estate

(c)(1)The values referred to in the ratio stated in subsection (b)(1) are the values determined for purposes of the tax imposed by such foreign country.

(2)The values referred to in the ratio stated in subsection (b)(2) are the values determined under this chapter; but, in applying such ratio, the value of any property described in subparagraphs (A), (B), and (C) thereof shall be reduced by such amount as will properly reflect, in accordance with regulations prescribed by the Secretary, the deductions allowed in respect of such property under section 2055 and 2056 (relating to charitable and marital deductions).

(d)The credit provided in this section shall be allowed only if the taxpayer establishes to the satisfaction of the Secretary—

(1)the amount of taxes actually paid to the foreign country,

(2)the amount and date of each payment thereof,

(3)the description and value of the property in respect of which such taxes are imposed, and

(4)all other information necessary for the verification and computation of the credit.

(e)The credit provided in this section shall be allowed only for such taxes as were actually paid and credit therefor claimed within 4 years after the filing of the return required by section 6018, except that—

(1)If a petition for redetermination of a deficiency has been filed with the Tax Court within the time prescribed in section 6213(a), then within such 4-year period or before the expiration of 60 days after the decision of the Tax Court becomes final.

(2)If, under section 6161, an extension of time has been granted for payment of the tax shown on the return, or of a deficiency, then within such 4-year period or before the date of the expiration of the period of the extension.

(f)In any case where a deduction is allowed under section 2053(d) for an estate, succession, legacy, or inheritance tax imposed by and actually paid to any foreign country upon a transfer by the decedent for public, charitable, or religious uses described in section 2055, the property described in subparagraphs (A), (B), and (C) of paragraphs (1) and (2) of subsection (b) of this section shall not include any property in respect of which such deduction is allowed under section 2053(d).

(g)For purposes of the credits authorized by this section, each possession of the United States shall be deemed to be a foreign country.

(h)Whenever the President finds that—

(1)a foreign country, in imposing estate, inheritance, legacy, or succession taxes, does not allow to citizens of the United States resident in such foreign country at the time of death a credit similar to the credit allowed under subsection (a),

(2)such foreign country, when requested by the United States to do so has not acted to provide such a similar credit in the case of citizens of the United States resident in such foreign country at the time of death, and

(3)it is in the public interest to allow the credit under subsection (a) in the case of citizens or subjects of such foreign country only if it allows such a similar credit in the case of citizens of the United States resident in such foreign country at the time of death,

Notes & Related Subsidiaries

Editorial Notes

Amendments

2001—Subsec. (b)(2). Pub. L. 107–16 struck out “, 2011,” after “section 2010” in introductory provisions. 1976—Subsec. (b)(2). Pub. L. 94–455, § 2001(c)(1)(G), inserted reference to section 2010 in introductory provisions. Subsecs. (c), (d). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”. 1966—Subsec. (a). Pub. L. 89–809 struck out provision that, if the decedent at the time of his death was not a citizen of the United States, credit would not be allowed under this section unless the foreign country of which the decedent was a citizen or subject, in imposing estate, inheritance, legacy, or succession taxes, allows a similar credit in the case of a citizen of the United States resident in such country. Subsec. (h). Pub. L. 89–809 added subsec. (h). 1959—Subsecs. (f), (g). Pub. L. 86–175 added subsec. (f) and redesignated former subsec. (f) as (g). 1958—Subsec. (f). Pub. L. 85–866 added subsec. (f).

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 1966 AmendmentAmendment by Pub. L. 89–809 applicable with respect to estates of decedents dying after Nov. 13, 1966, see section 106(b)(4) of Pub. L. 89–809, set out as a note under section 901 of this title.

Effective Date

of 1959 AmendmentAmendment by Pub. L. 86–175 applicable with respect to estates of decedents dying on or after July 1, 1955, see section 4 of Pub. L. 86–175, set out as a note under section 2053 of this title.

Effective Date

of 1958 Amendment Pub. L. 85–866, title I, § 102(d), Sept. 2, 1958, 72 Stat. 1675, provided that: “The

Amendments

made by this section (other than by subsection (b)) [enacting section 2208 of this title and amending this section and section 2011 and 2053 of this title] shall apply to the estates of decedents dying after the date of the enactment of this Act [Sept. 2, 1958]. The amendment made by subsection (b) [amending section 2501 of this title] shall apply to gifts made after the date of the enactment of this Act.”

§2014 Credit for Foreign Death Taxes

Summary

Title 26, §2014

Notes & Related Subsidiaries

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Statutory Notes and Related Subsidiaries

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