26 U.S.C. § 2014 — Credit for foreign death taxes

submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 946 words · no verdicts yet

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This section allows a credit against Federal estate tax for qualifying foreign death taxes paid on property in a foreign country and included in the gross estate. It limits, documents, and times the credit, and lets the President require reciprocal treatment for certain foreign citizens.

(a) In general.—The section 2001 tax is credited with estate, inheritance, legacy, or succession taxes actually paid to a foreign country on property located there and included in the gross estate. Taxes on another person’s estate do not count. Property location is determined under subchapter B. (b) Limits.—For each foreign tax, the credit cannot exceed that tax multiplied by the ratio of the qualifying property’s value to the value of all property subject to that tax. For all such taxes, the credit cannot exceed the section 2001 tax after sections 2010 and 2012 credits, multiplied by the ratio of qualifying property to the entire gross estate after sections 2055 and 2056 deductions. Qualifying property must be in the foreign country, subject to its taxes, and included in the gross estate. (c) Values.—For the first ratio, use values determined for the foreign tax. For the second, use values under this chapter, reducing qualifying property as regulations require to reflect charitable and marital deductions. (d) Proof.—The taxpayer must satisfy the Secretary about the taxes actually paid, each payment’s amount and date, the property’s description and value, and all other information needed to verify and calculate the credit. (e) Time limit.—The taxes must be paid and the credit claimed within four years after filing the section 6018 return. If a timely Tax Court deficiency petition was filed, the deadline is the later of that four-year period or 60 days after the decision becomes final. If section 6161 extended the payment period, the deadline is the later of four years or the end of that extension. A refund based on the credit may be made if claimed within the applicable period, despite sections 6511 and 6512, but without interest. (f) Section 2053(d).—When a section 2053(d) deduction covers a foreign death tax on a charitable transfer under section 2055, the property used in the ratios in subsection (b) excludes property covered by that deduction. (g) A United States possession is treated as a foreign country for these credits. (h) Reciprocal credit.—If the President finds that a foreign country does not give similarly situated United States citizens a similar credit, has not done so after a United States request, and that the public interest supports reciprocity, the President must proclaim that citizens or subjects of that country who die while the proclamation is effective receive the subsection (a) credit only if that country gives the similar credit to United States citizens residing there at death.

the actual law source: uscode.house.gov ↗public domain

(a) In general

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) Limitations on credit

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

bears to the value of all property subjected to such tax; and

(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 sections 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

bears to the value of the entire gross estate reduced by the aggregate amount of the deductions allowed under sections 2055 and 2056.

(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 sections 2055 and 2056 (relating to charitable and marital deductions).

(d) Proof of credit

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) Period of limitation

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.

Refund based on such credit may (despite the provisions of sections 6511 and 6512) be made if claim therefor is filed within the period above provided. Any such refund shall be made without interest.

(f) Additional limitation in cases involving a deduction under section 2053(d)

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) Possession of United States deemed a foreign country

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

(h) Similar credit required for certain alien residents

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,

the President shall proclaim that, in the case of citizens or subjects of such foreign country dying while the proclamation remains in effect, the credit under subsection (a) shall be allowed only if such foreign country allows such a similar credit in the case of citizens of the United States resident in such foreign country at the time of death.

Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 378; Pub. L. 85–866, title I, § 102(c)(2), Sept. 2, 1958, 72 Stat. 1674; Pub. L. 86–175, § 2, Aug. 21, 1959, 73 Stat. 397; Pub. L. 89–809, title I, § 106(b)(3), Nov. 13, 1966, 80 Stat. 1570; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), title XX, § 2001(c)(1)(G), Oct. 4, 1976, 90 Stat. 1834, 1852; Pub. L. 107–16, title V, § 532(c)(3), June 7, 2001, 115 Stat. 74.)

history & why it existsrecord from the source credit

1954Enacted · Act of Aug. 16, 1954, ch. 736
1958Amended · Pub. L. 85-866 · 72 Stat. 1674
1959Amended · Pub. L. 86-175 · 73 Stat. 397
1966Amended · Pub. L. 89-809 · 80 Stat. 1570
1976Amended · Pub. L. 94-455 · 90 Stat. 1834, 1852
2001Amended · Pub. L. 107-16 · 115 Stat. 74

A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.

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