View all text of Subjgrp 4 [§ 20.2011–1 - § 20.2016–1]

§ 20.2013–6 - Examples.

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 estate910,000.00 Marital deduction$100,000.00 Exemption60,000.00 160,000.00 A's taxable estate750,000.00 A's gross estate tax233,200.00 Credit for State death taxes23,280.00 A's net estate tax payable209,920.00 “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
(c) “Second limitation” on credit for B's estate (§ 20.2013–3):

(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 deduction150,000.00 Exemption60,000.00 250,000.00 B's taxable estate250,000.00 B's gross estate tax$65,700.00 Credit for State death taxes3,920.00 B's net estate tax payable61,780.00
(2) B's net estate tax payable as described in § 20.2013–3(a)(2) (previously taxed transfer excluded):
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 Exemption60,000.00 217,391.30 B's taxable estate182,608.70 B's gross estate tax45,482.61 Credit for State death taxes2,221.61 B's net estate tax payable43,260.00
(3) “Second limitation”:
Subparagraph (1)$61,780.00 Less: Subparagraph (2)43,260.00 $18,520.00
(d) Credit of B's estate for tax on prior transfers (§ 20.2013–1(c)):
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
Example (2).(a) The facts are the same as those contained in example (1) of this paragraph with the following additions. C died December 1, 1950, leaving a gross estate of $250,000. Expenses, indebtedness, etc., amounted to $50,000. C bequeathed $50,000 to B. C was a citizen of the United States. His estate 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(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 estate140,000.00 C's gross estate tax32,700.00 Credit for State death taxes1,200.00 C's net estate tax payable31,500.00 “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
(c) “Second limitation” on credit for B's estate (§ 20.2013–3(c)):

(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 Exemption60,000.00 201,086.96 B's taxable estate148,913.04 B's gross estate tax35,373.91 Credit for State death taxes1,413.91 B's net estate tax payable33,960.00
(3) “Second limitation”:
Subparagraph (1)$61,780.00 Less: Subparagraph (2)33,960.00 $27,820.00
(4) Apportionment of “second limitation” on credit:
Transfer from A (§ 20.2013–4)$100,000.00 Transfer from C (§ 20.2013–4)50,000.00 Total150,000.00 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
(d) Credit of B's estate for tax on prior transfers (§ 20.2013–1(c)):
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 transfers25,965.33