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Internal Revenue Code, § 2106. Taxable Estate

I.R.C. § 2106(a) Definition Of Taxable Estate
For purposes of the tax imposed by section 2101, the value of the taxable estate of every decedent nonresident not a citizen of the United States shall be determined by deducting from the value of that part of his gross estate which at the time of his death is situated in the United States—
I.R.C. § 2106(a)(1) Expenses, Losses, Indebtedness, And Taxes
That proportion of the deductions specified in sections 2053 and 2054 (other than the deductions described in the following sentence) which the value of such part bears to the value of his entire gross estate, wherever situated. Any deduction allowable under section 2053 in the case of a claim against the estate which was founded on a promise or agreement but was not contracted for an adequate and full consideration in money or money's worth shall be allowable under this paragraph to the extent that it would be allowable as a deduction under paragraph (2) if such promise or agreement constituted a bequest.
I.R.C. § 2106(a)(2) Transfers For Public, Charitable, And Religious Uses
I.R.C. § 2106(a)(2)(A) In General
The amount of all bequests, legacies, devises, or transfers (including the interest which falls into any such bequest, legacy, devise, or transfer as a result of an irrevocable disclaimer of a bequest, legacy, devise, transfer, or power, if the disclaimer is made before the date prescribed for the filing of the estate tax return)—
I.R.C. § 2106(a)(2)(A)(i)
to or for the use of the United States, any State, any political subdivision thereof, or the District of Columbia, for exclusively public purposes;
I.R.C. § 2106(a)(2)(A)(ii)
to or for the use of any domestic corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, including the encouragement of art and the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private stockholder or individual, which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office; or
I.R.C. § 2106(a)(2)(A)(iii)
to a trustee or trustees, or a fraternal society, order, or association operating under the lodge system, but only if such contributions or gifts are to be used within the United States by such trustee or trustees, or by such fraternal society, order, or association, exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, such trust, fraternal society, order, or association would not be disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation, and such trustee or trustees, or such fraternal society, order, or association, does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office;
I.R.C. § 2106(a)(2)(B) Powers Of Appointment
Property includible in the decedent's gross estate under section 2041 (relating to powers of appointment) received by a donee described in this paragraph shall, for purposes of this paragraph, be considered a bequest of such decedent.
I.R.C. § 2106(a)(2)(C) Death Taxes Payable Out Of Bequests
If the tax imposed by section 2101, or any estate, succession, legacy, or inheritance taxes, are, either by the terms of the will, by the law of the jurisdiction under which the estate is administered, or by the law of the jurisdiction imposing the particular tax, payable in whole or in part out of the bequests, legacies, or devises otherwise deductible under this paragraph, then the amount deductible under this paragraph shall be the amount of such bequests, legacies, or devises reduced by the amount of such taxes.
I.R.C. § 2106(a)(2)(D) Limitation On Deduction
The amount of the deduction under this paragraph for any transfer shall not exceed the value of the transferred property required to be included in the gross estate.
I.R.C. § 2106(a)(2)(E) Disallowance Of Deductions In Certain Cases
The provisions of section 2055(e) shall be applied in the determination of the amount allowable as a deduction under this paragraph.
I.R.C. § 2106(a)(2)(F) Cross References
I.R.C. § 2106(a)(2)(F)(i)
For option as to time for valuation for purposes of deduction under this section, see section 2032.
I.R.C. § 2106(a)(2)(F)(ii)
For exemption of certain bequests for the benefit of the United States and for rules of construction for certain bequests, see section 2055(g).
I.R.C. § 2106(a)(2)(F)(iii)
For treatment of gifts and bequests to or for the use of Indian tribal governments (or their subdivisions), see section 7871.
I.R.C. § 2106(a)(3) Marital Deduction
The amount which would be deductible with respect to property situated in the United States at the time of the decedent's death under the principles of section 2056.
I.R.C. § 2106(a)(4) State Death Taxes
The amount which bears the same ratio to the State death taxes as the value of the property, as determined for purposes of this chapter, upon which State death taxes were paid and which is included in the gross estate under section 2103 bears to the value of the total gross estate under section 2103. For purposes of this paragraph, the term “State death taxes” means the taxes described in section 2058(a).
I.R.C. § 2106(b) Condition Of Allowance Of Deductions
No deduction shall be allowed under paragraphs (1) and (2) of subsection (a) in the case of a nonresident not a citizen of the United States unless the executor includes in the return required to be filed under section 6018 the value at the time of his death of that part of the gross estate of such nonresident not situated in the United States.
(Aug. 16, 1954, ch. 736, 68A Stat. 398; Sept. 2, 1958, Pub. L. 85-866, title I, Sec. 30(d), 72 Stat. 1631; Sept. 14, 1960, Pub. L. 86-779, Sec. 4(c), 74 Stat. 1000; Nov. 13, 1966, Pub. L. 89-809, title I, Sec. 108(e), 80 Stat. 1572; Dec. 30, 1969, Pub. L. 91-172, title II, Sec. 201(d)(2), (4)(B), 83 Stat. 561; Oct. 4, 1976, Pub. L. 94-455, title XIII, Sec. 1307(d)(1)(B)(iii), (C), title XIX, Sec. 1902(a)(5), (12)(A), title XX, Sec. 2001(c)(1)(F), 90 Stat. 1727, 1805, 1852; Jan. 14, 1983, Pub. L. 97-473, title II, Sec. 202(b)(6), 96 Stat. 2610; Oct. 22, 1986, Pub. L. 99-514, title XIV, Sec. 1422(c), 100 Stat. 2717; Dec. 22, 1987, Pub. L. 100-203, title X, Sec. 10711(a)(4), 101 Stat. 1330-464; Nov. 10, 1988, Pub. L. 100-647, title V, Sec. 5033(c), 102 Stat. 3672; Dec. 19, 1989, Pub. L. 101-239, title VII, Sec. 7815(d)(3), 103 Stat. 2415; June 7, 2001, Pub. L. 107-16, title V, Sec. 532(c)(8), 115 Stat. 38; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(95)(A)(ii), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(203), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018 - Subsec. (a)(4). Pub. L. 115-141, Div. U, Sec. 401(a)(203), amended par. (4) by inserting “section” before “2058(a)”.
2014 - Subsec. (a)(4). Pub. L. 113-295, Div. A, Sec. 221(a)(95)(A)(ii), amended par. (4) by substituting “2058(a)” for “section 2011(a)”.
2001 - Subsec. (a)(4). Pub. L. 107-16, Sec. 532(c)(8), added par. (4).
1989 - Subsec. (a)(3). Pub. L. 101-239 struck out ‘allowed where spouse is citizen’ after ‘deduction’ in heading.
1988 - Subsec. (a)(3). Pub. L. 100-647 added par. (3).
1987 - Subsec. (a)(2)(A)(ii), (iii). Pub. L. 100-203 inserted ‘(or in opposition to)’ after ‘on behalf of’.
1986 - Subsec. (a)(2)(F)(ii). Pub. L. 99-514 substituted ‘section 2055(g)’ for ‘section 2055(f)’.
1983 - Subsec. (a)(2)(F). Pub. L. 97-473 substituted ‘(i)’ and ‘(ii)’ for ‘(1)’ and ‘(2)’, respectively, and added cl. (iii).
1976 - Subsec. (a)(2)(A)(i). Pub. L. 94-455, Sec. 1902 (a)(12)(A), struck out ‘Territory’ after ‘any State’.
Subsec. (a)(2)(A)(ii). Pub. L. 94-455, Sec. 1307(d)(1)(B)(iii), substituted ‘which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation’ for ‘no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation’ after ‘stockholder or individual’.
Subsec. (a)(2)(A)(iii). Pub. L. 94-455, Sec. 1307(d)(1)(C), substituted ‘such trust, fraternal society, order, or association would not be disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation’ for ‘no substantial part of the activities of such trustee or trustees, or of such fraternal society, order, or association, is carrying on propaganda, or otherwise attempting, to influence legislation’ after ‘children or animals’.
Subsec. (a)(2)(F). Pub. L. 94-455, Sec. 1902(a)(5)(A), substituted ‘Cross references’ for ‘Other cross references’ after ‘(F)’, in cl. (1) ‘purposes of deduction under this section’ for ‘purpose of deduction under this paragraph’ after ‘valuation for’, in cl. (2) provision for exemption of certain bequests for benefit of United States and for rules of construction for certain bequests, for provisions of cls. (2) to (11) relating to bequests to; Library of Congress, Post Office Department, Office of Naval Records and Library, National Park Service, Department of State, Department of Justice, payment of tax on bequests of United States obligations, Naval Academy, Naval Academy Museum, and National Archives Trust Fund Board, respectively.
Subsec. (a)(3). Pub. L. 94-455, Sec. 2001(c)(1)(F), struck out par. (3) relating to specific exemption in case of decedents nonresidents not citizens.
Subsec. (c). Pub. L. 94-455, Sec. 1902(a)(5)(B), struck out subsec. (c) relating to treatment of United States bonds in determining gross estate of a decedent who was not engaged in business in the United States at the time of his death.
1969 - Subsec. (a)(2)(A)(ii), (iii). Pub. L. 91-172, Sec. 201(d)(4)(B), inserted non-participation and non-intervention in political campaigns as an additional qualification.
Subsec. (a)(2)(E). Pub. L. 91-172, Sec. 201(d)(2), substituted substantive provisions for simple reference to sections 503 and 681 of this title in which such substantive provisions were formerly set out.
1966 - Subsec. (a)(3). Pub. L. 89-809 substituted ‘$30,000’ for ‘$2,000’ as size of exemption in subpar. (A) and ‘$30,000’ for ‘$2,000’ as item (i) in formula set out in subpar. (B).
1960 - Subsec. (a)(3). Pub. L. 86-779 designated existing provisions as subpar. (A) and added subpar. (B).
1958 - Subsec. (a)(2)(E). Pub. L. 85-866 substituted ‘503’ for ‘504’.
EFFECTIVE DATE OF 2018 AMENDMENT
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(203), effective March 23, 2018.
EFFECTIVE DATE OF 2014 AMENDMENT
Amendment by Pub. L. 113-295, Div. A, Sec. 221(a)(95)(A)(ii), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014].
Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:
“(2) SAVINGS PROVISION.—If—
“(A) any provision amended or repealed by the amendments made by this section applied to—
“(i) any transaction occurring before the date of the enactment of this Act [Enacted: Dec. 19, 2014],
“(ii) any property acquired before such date of enactment, or
“(iii) any item of income, loss, deduction, or credit taken into account before such date of enactment, and
“(B) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this section) affect the liability for tax for periods ending after date of enactment, nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.”
EFFECTIVE DATE OF 2001 AMENDMENT
Amendment by Pub. L. 107-16, Sec. 532(a)(4), effective for estates of decedents dying, and generation-skipping transfers, after December 31, 2004.
Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358 and Pub. L. 111-312, Sec. 101(a),and struck by Pub. L. 112-240, Sec. 101(a)(1) (effective for taxable, plan, or limitation years beginning after Dec. 31, 2012, and estates of decedents dying, gifts made, or generation skipping transfers after Dec. 31, 2012), provided that:
“(a) IN GENERAL.--All provisions of, and amendments made by, this Act shall not apply--
“(1) to taxable, plan, or limitation years beginning after December 31, 2012, or
“(2) in the case of title V, to estates of decedents dying, gifts made, or generation skipping transfers, after December 31, 2012.
“(b) APPLICATION OF CERTAIN LAWS.--The Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 shall be applied and administered to years, estates, gifts, and transfers described in subsection (a) as if the provisions and amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.-Subsection (a) shall not apply to section 803 (relating to no federal income tax on restitution received by victims of the Nazi regime or their heirs or estates).”
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by Pub. L. 101-239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such amendment relates, see section 7817 of Pub. L. 101-239, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 applicable to estates of decedents dying after Nov. 10, 1988, see section 5033(d)(1) of Pub. L. 100-647, set out as a note under section 2056 of this title.
EFFECTIVE DATE OF 1987 AMENDMENT
Amendment by Pub. L. 100-203 applicable with respect to activities after Dec. 22, 1987, see section 10711(c) of Pub. L. 100-203, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 applicable to transfers and contributions made after Dec. 31, 1986, see section 1422(e) of Pub. L. 99-514, set out as a note under section 2055 of this title.
EFFECTIVE DATE OF 1983 AMENDMENT
For effective date of amendment by Pub. L. 97-473, see section 204(3) of Pub. L. 97-473, set out as an Effective Date note under section 7871 of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1902(a)(5) of Pub. L. 94-455 applicable in the case of 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 2011 of this title.
Amendment by section 2001(c)(1)(F) of Pub. L. 94-455 applicable to estates of decedents dying after Dec. 31, 1976, see section 2001(d)(1) of Pub. L. 94-455, set out as a note under section 2001 of this title.
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by section 201(d)(2) of Pub. L. 91-172 applicable in the case of decedents dying after Dec. 31, 1969, with specified exceptions, see section 201(g)(4) of Pub. L. 91-172, set out as a note under section 170 of this title.
Amendment by section 201(d)(4)(B) of Pub. L. 91-172 applicable to gifts and transfers made after Dec. 31, 1969, see section 201(g)(4) of Pub. L. 91-172, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Amendment by Pub. L. 89-809 applicable with respect to estates of decedents dying after Nov. 13, 1966, see section 108(i) of Pub. L. 89-809, set out as a note under section 2101 of this title.
EFFECTIVE DATE OF 1960 AMENDMENT
Section 4(e)(2) of Pub. L. 86-779 provided that: ‘The amendments made by subsections (b) and (c) (enacting section 2209 of this title and amending this section) shall apply with respect to estates of decedents dying after the date of the enactment of this Act (Sept. 14, 1960).’
REINSTATEMENT OF ESTATE TAX; REPEAL OF CARRYOVER BASIS
Section 301 of Pub. L. 111-312 provided:
“(a) IN GENERAL.—Each provision of law amended by subtitle A or E of title V of the Economic Growth and Tax Relief Reconciliation Act of 2001 is amended to read as such provision would read if such subtitle had never been enacted.
“(b) CONFORMING AMENDMENT.—On and after January 1, 2011, paragraph (1) of section 2505(a) of the Internal Revenue Code of 1986 is amended to read as such paragraph would read if section 521(b)(2) of the Economic Growth and Tax Relief Reconciliation Act of 2001 had never been enacted.
“(c) SPECIAL ELECTION WITH RESPECT TO ESTATES OF DECEDENTS DYING IN 2010.—Notwithstanding subsection (a), in the case of an estate of a decedent dying after December 31, 2009, and before January 1, 2011, the executor (within the meaning of section 2203 of the Internal Revenue Code of 1986) may elect to apply such Code as though the amendments made by subsection (a) do not apply with respect to chapter 11 of such Code and with respect to property acquired or passing from such decedent (within the meaning of section 1014(b) of such Code). Such election shall be made at such time and in such manner as the Secretary of the Treasury or the Secretary's delegate shall provide. Such an election once made shall be revocable only with the consent of the Secretary of the Treasury or the Secretary's delegate. For purposes of section 2652(a)(1) of such Code, the determination of whether any property is subject to the tax imposed by such chapter 11 shall be made without regard to any election made under this subsection.
“(d) EXTENSION OF TIME FOR PERFORMING CERTAIN ACTS.—
“ (1) ESTATE TAX.—In the case of the estate of a decedent dying after December 31, 2009, and before the date of the enactment of this Act, the due date for—
“(A) filing any return under section 6018 of the Internal Revenue Code of 1986 (including any election required to be made on such a return) as such section is in effect after the date of the enactment of this Act without regard to any election under subsection (c),
“(B) making any payment of tax under chapter 11 of such Code, and
“(C) making any disclaimer described in section 2518(b) of such Code of an interest in property passing by reason of the death of such decedent, shall not be earlier than the date which is 9 months after the date of the enactment of this Act.
“(2) GENERATION-SKIPPING TAX.—In the case of any generation-skipping transfer made after December 31, 2009, and before the date of the enactment of this Act, the due date for filing any return under section 2662 of the Internal Revenue Codeof 1986 (including any election required to be made on such a return) shall not be earlier than the date which is 9 months after the date of the enactment of this Act.
“(e) EFFECTIVE DATE.—Except as otherwise provided in this section, the amendments made by this section shall apply to estates of decedents dying, and transfers made, after December 31, 2009.”
TERMINATION
Section 501(a) (Estate Tax Repeal) of Pub. L. 107-16 added Code Sec. 2210, which states that chapter 11 of subtitle B shall not apply to the estates of decedents dying after December 31, 2009.
Note, however, that Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358 and Pub. L. 111-312, and struck by Pub. L. 112-240, Sec. 101(a)(1) (effective for taxable, plan, or limitation years beginning after Dec. 31, 2012, and estates of decedents dying, gifts made, or generation skipping transfers after Dec. 31, 2012), provided that:
“(a) IN GENERAL.--All provisions of, and amendments made by, this Act shall not apply--
“(1) to taxable, plan, or limitation years beginning after December 31, 2012, or
“(2) in the case of title V, to estates of decedents dying, gifts made, or generation skipping transfers, after December 31, 2012.
“(b) APPLICATION OF CERTAIN LAWS.--The Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 shall be applied and administered to years, estates, gifts, and transfers described in subsection (a) as if the provisions and amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.-Subsection (a) shall not apply to section 803 (relating to no federal income tax on restitution received by victims of the Nazi regime or their heirs or estates).”
APPLICATION OF AMENDMENTS BY SECTION 5033 OF PUB. L. 100-647 TO ESTATES OF, OR GIFTS BY, NONCITIZEN AND NONRESIDENT INDIVIDUALS
For provisions directing that in the case of the estate of, or gift by, an individual who was not a citizen or resident of the United States but was a resident of a foreign country with which the United States has a tax treaty with respect to estate, inheritance, or gift taxes, the amendments made by section 5033 of Pub. L. 100-647 shall not apply to the extent such amendments would be inconsistent with the provisions of such treaty relating to estate, inheritance, or gift tax marital deductions, but that in the case of the estate of an individual dying before the date 3 years after Dec. 19, 1989, or a gift by an individual before the date 3 years after Dec. 19, 1989, the requirement of the preceding provision that the individual not be a citizen or resident of the United States shall not apply, see section 7815(d)(14) of Pub. L. 101-239, set out as a note under section 2056 of this title.