[Code of Federal Regulations]
[Title 26, Volume 14]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR20.2013-1]

[Page 245]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 20_ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 
1954--Table of Contents
 
Sec.  20.2013-1  Credit for tax on prior transfers.

    (a) In general. A credit is allowed under section 2013 against the 
Federal estate tax imposed on the present decedent's estate for Federal 
estate tax paid on the transfer of property to the present decedent from 
a transferor who died within ten years before, or within two years 
after, the present decedent's death. See Sec.  20.2013-5 for definition 
of the terms ``property'' and ``transfer''. There is no requirement that 
the transferred property be identified in the estate of the present 
decedent or that the property be in existence at the time of the 
decedent's death. It is sufficient that the transfer of the property was 
subjected to Federal estate tax in the estate of the transferor and that 
the transferor died within the prescribed period of time. The executor 
must submit such proof as may be requested by the district director in 
order to establish the right of the estate to the credit.
    (b) Limitations on credit. The credit for tax on prior transfers is 
limited to the smaller of the following amounts:
    (1) The amount of the Federal estate tax attributable to the 
transferred property in the transferor's estate, computed as set forth 
in Sec.  20.2013-2; or
    (2) The amount of the Federal estate tax attributable to the 
transferred property in the decedent's estate, computed as set forth in 
Sec.  20.2013-3.

Rules for valuing property for purposes of the credit are contained in 
Sec.  20.2013-4.
    (c) Percentage reduction. If the transferor died within the two 
years before, or within the two years after, the present decedent's 
death, the credit is the smaller of the two limitations described in 
paragraph (b) of this section. If the transferor predeceased the present 
decedent by more than two years, the credit is a certain percentage of 
the smaller of the two limitations described in paragraph (b) of this 
section, determined as follows:
    (1) 80 percent, if the transferor died within the third or fourth 
years preceding the present decedent's death;
    (2) 40 percent, if the transferor died within the fifth or sixth 
years preceding the present decedent's death;
    (3) 40 percent, if the transferor died within the seventh or eighth 
years preceding the present decedent's death; and
    (4) 20 percent, if the transferor died within the ninth or tenth 
years preceding the present decedent's death.

The word ``within'' as used in this paragraph means ``during''. 
Therefore, if a death occurs on the second anniversary of another death, 
the first death is considered to have occurred within the two years 
before the second death. If the credit for tax on prior transfers 
relates to property received from two or more transferors, the 
provisions of this paragraph are to be applied separately with respect 
to the property received from each transferor. See paragraph (d) of 
example (2) in Sec.  20.2013-6.
    (d) Examples. For illustrations of the application of this section, 
see examples (1) and (2) set forth in Sec.  20.2013-6.