The application of §§ 20.2013-1 to 20.2013-5 may be further illustrated by the following examples:
Example (1).(a) A died December 1, 1953, leaving a gross estate of $1,000,000. Expenses, indebtedness, etc., amounted to $90,000. A bequeathed $200,000 to B, his wife, $100,000 of which qualified for the marital deduction. B died November 1, 1954, leaving a gross estate of $500,000. Expenses, indebtedness, etc., amounted to $40,000. B bequeathed $150,000 to charity. A and B were both citizens of the United States. The estates of A and B both paid State death taxes equal to the maximum credit allowable for State death taxes. Death taxes were not a charge on the bequest to B.
(b) “First limitation” on credit for B's estate (§ 20.2013-2):
| A's gross estate | $1,000,000.00
|
| Expenses, indebtedness, etc. | 90,000.00
|
| A's adjusted gross estate | 910,000.00
|
| Marital deduction | $100,000.00
| |
| Exemption | 60,000.00
| |
| | 160,000.00
|
| A's taxable estate | 750,000.00
|
| A's gross estate tax | 233,200.00
|
| Credit for State death taxes | 23,280.00
|
| A's net estate tax payable | 209,920.00
|
| “First limitation” = $209,920.00 (§ 20.2013-2(b)) × [($200,000.00 − $100,000.00) (§ 20.2013-4) ÷ ($750,000.00 − $209,920.00 − $23,280.00 + $60,000.00) (§ 20.2013-2(c))] | | $36,393.90 |
(1) B's net estate tax payable as described in § 20.2013-3(a)(1) (previously taxed transfer included):
| B's gross estate | $500,000.00
| |
| Expenses, indebtedness, etc. | $40,000.00
| |
| Charitable deduction | 150,000.00
| |
| Exemption | 60,000.00
| |
| | | 250,000.00
|
| B's taxable estate | | 250,000.00
|
| B's gross estate tax | $65,700.00
|
| Credit for State death taxes | 3,920.00
|
| B's net estate tax payable | 61,780.00 |
| B's gross estate | | $400,000.00
|
| Expenses, indebtedness, etc | $40,000.00
| |
| Charitable deduction (§ 20.2013-3(b)) = $150,000.00 − [$150,000.00 × ($200,000.00 − $100,000.00 ÷ $500,000.00 − $40,000.00)] | 117,391.30
| |
| Exemption | 60,000.00
| |
| | | 217,391.30
|
| B's taxable estate | 182,608.70
|
| B's gross estate tax | 45,482.61
|
| Credit for State death taxes | 2,221.61
|
| B's net estate tax payable | 43,260.00 |
| Subparagraph (1) | $61,780.00
| |
| Less: Subparagraph (2) | 43,260.00
| |
| | | $18,520.00 |
| Credit for tax on prior transfers = $18,520.00 (lower of paragraphs (b) and (c)) × 100 percent (percentage to be taken into account under § 20.2013-1(c)) | $18,520.00 |
(b) “First limitation” on credit for B's estate (§ 20.2013-2(d))−
(1) With respect to the property received from A:
“First limitation” = $36,393.90 (this computation is identical with the one contained in paragraph (b) of example (1) of this section).
(2) With respect to the property received from C:
| C's gross estate | | $250,000.00
|
| Expenses, indebtedness, etc. | $50,000.00
| |
| Exemption | $60,000.00
| |
| | | $110,000.00
|
| C's taxable estate | | 140,000.00
|
| C's gross estate tax | | 32,700.00
|
| Credit for State death taxes | | 1,200.00
|
| C's net estate tax payable | | 31,500.00
|
| “First limitation” = $31,500.00 (§ 20.2013-2(b)) × [$50,000.00 (§ 20.2013-4) ÷ ($140,000.00 − $31,500.00 − $1,200.00 + $60,000.00) (§ 20.2013-2(c))] | $9,414.23 |
(1) B's net estate tax payable as described in § 20.2013-3(a)(1) (previously taxed transfers included) = $61,780.00 (this computation is identical with the one contained in paragraph (c)(1) of example (1) of this section).
(2) B's net estate tax payable as described in § 20.2013-3(a)(2) (previously taxed transfers excluded):
| B's gross estate | $350,000.00
|
| Expenses, indebtedness, etc | $40,000.00
| |
| Charitable deduction (§ 20.2013-3(b)) = $150,000.00 − [$150,000.00 × ($200,000.00 − $100,000.00 + $50,000.00) ÷ ($500,000.00 − $40,000.00)] | 101,086.96
| |
| Exemption | 60,000.00
| |
| 201,086.96
|
| B's taxable estate | | 148,913.04
|
| B's gross estate tax | | 35,373.91
|
| Credit for State death taxes | | 1,413.91
|
| B's net estate tax payable | | 33,960.00 |
| Subparagraph (1) | $61,780.00
| |
| Less: Subparagraph (2) | 33,960.00
| |
| | | $27,820.00 |
| Transfer from A (§ 20.2013-4) | $100,000.00
|
| Transfer from C (§ 20.2013-4) | 50,000.00
|
| Total | 150,000.00
|
| Portion of “second limitation” attributable to transfer from A (100/150 of $27,820.00) | 18,546.67
|
| Portion of “second limitation” attributable to transfer from C (50/150 of $27,820.00) | 9,273.33 |
| Credit for tax on transfer from A=
| |
| $18,546.67 (lower of “first limitation” computed in paragraph (b)(1) and “second limitation” apportioned to A's transfer in paragraph (c)(4)) × 100 percent (percentage to be taken into account under § 20.2013-1(c)) | $18,546.67
|
| Credit for tax on transfer from C=
| |
| $9,273.33 (lower of “first limitation” computed in paragraph (b)(2) and “second limitation” apportioned to B's transfer in paragraph (c)(4)) × 80 percent (percentage to be taken into account under § 20.2013-1(c)) | 7,418.66
|
| Total credit for tax on prior transfers | 25,965.33 |
source: T.D. 6296, 23 FR 4529, June 24, 1958; 25 FR 14021, Dec. 31, 1960, unless otherwise noted.
cite as: 26 CFR 20.2013-6